Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
After trading slightly up most today's session, the Dow Jones Industrial Average (^DJI 1.01%) dipped late to finish down 67 points, or 0.4%, its fourth straight loss. Worries about a government shutdown and the impending approach of the debt ceiling seemed to hit investors late in the day. While Republicans seemed to back away from Sen. Ted Cruz's plan to filibuster any attempt by the Democrats to keep the government running without defunding Obamacare, Senate Democrats may be waiting till the end of the week to send the bill back to the House with Obamacare funded, leaving the House with the choice of shutting down the government if it wishes to continue the debate over the Affordable Care Act.
Meanwhile, the debt ceiling began creeping onto investors' radars. If Congress doesn't raise the national borrowing limit, which it's expected to reach between Oct. 18 and Nov. 6, the U.S. will default on its debt. Americans have seen this drama play out before, and Congress has always done the responsible thing in the end, but in 2011 it cost the country its "AAA" credit and led to more than a 1,000-point drop in the Dow.
JPMorgan Chase (JPM 1.27%) fell sharply once again today, down 2.2%, as the bank entered talks with the Justice Department on an all-encompassing settlement that would resolve several mortgage-related probes by the government. The bank offered $3 billion, but the DOJ said that wasn't enough. While that may seem to be a steep price tag, it seems to be in the best interests of the bank to put the stains of the financial crisis and the London Whale incident behind it and begin repairing its reputation. For long-term investors, the drop may present a buying opportunity, depending on the final result, as the stock now trades at a P/E under 9. After last spring's drop following the London Whale loss, shares have gained more than 50%.
On the other end, Boeing (BA 2.63%) shares were the blue chips' best performer, gaining 1.2% despite losing out on a $7.6 billion South Korean bid it appeared to have locked up, as it was the last remaining bidder. South Korea rejected Boeing's proposal for its F-15 Silent Eagle, saying it was not effective at dealing with North Korea's nuclear threat, and it will reopen the bidding process. Still, what seemed to push Boeing shares up was an announcement by rival Airbus, which bumped up its projection of global aircraft demand by 3.6% to $4.4 trillion over the next 20 years thanks to growth in Asia. As Boeing and Airbus dominate the industry, the news should favor Boeing as well.
