Markets are despondent today, as Thursday's debt ceiling deadline approaches with no viable plan in sight to fund the government beyond that day.

Both the S&P 500 and the Dow Jones Industrial Average (DJINDICES:^DJI) are down, as worries mount -- particularly about the effect of a debt ceiling breach on the $5 trillion short-term repurchase agreement market. The Financial Times reports that banks are scrambling to preserve their access to this crucial funding source, as a default by the U.S. government threatens to deflate the value of short-term Treasury bonds used as collateral in repo transactions.

The fog began to lift a bit before the noon hour, but both indexes remained firmly in negative territory.

Lots of red in the Dow today
Concern over the debt ceiling may explain why big banks JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) are in the dumps today, though there is still no shortage of long faces on the Dow by late morning.

JPMorgan's less-than-stellar third-quarter earnings report is likely still stinging, though CEO Jamie Dimon got a nice buildup in a speech by JPMorgan board member Laban Jackson yesterday. At the National Association of Corporate Directors conference in Maryland, Jackson noted that, while Dimon isn't perfect, he's an excellent manager who deserves the support of stockholders. Still, the big bank is down nearly 1.30% so far today.

Goldman Sachs revised its fourth-quarter earnings estimate in light of the government shutdown, and its stock price has dropped by about the same percentage as JPMorgan's by late morning.

In the pharma sector, Merck (NYSE:MRK) is dropping after being downgraded to "market perform" from "outperform" by Bernstein this morning. The stock suffered a reduction in Barclays' eyes, as well, dropping to "equal weight" from "over weight." These slaps follow a cut by Jefferies on Friday, despite the drug giant's recent announcements regarding stock repurchases and expense-slashing.

Despite the ongoing government slowdown, Boeing (NYSE:BA) is up more than 0.50% as lunchtime approaches, even though Bloomberg reports that management may furlough workers in several departments if the crisis drags on much longer. The temporary layoffs may occur if stop-work orders are received, or if access to work sites and government inspectors becomes problematic. The defense, space, and security units constituted 40% of Boeing's revenues last year.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.