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Shutdown Deadline Approaches and Markets Tumble

By Matt Thalman - Sep 30, 2013 at 1:27PM

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Government shutdown may represent a great buying opportunity as stocks fall across the board.

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.

The federal government will shut down if Congress can't come up with a budget compromise by midnight tonight. Since it looks as if we will not have news on any solution, either temporary or long-term, before the markets close at 4 p.m. EDT, investors should just sit tight and accept that the major indexes and stocks in general will close in the red today.

As of 1:20 p.m. EDT the Dow Jones Industrial Average (^DJI 0.17%) was down 80 points, or 0.53%, while the S&P 500 was off by 0.33% and the NASDAQ was down 0.1%. While today certainly represents a great buying opportunity as stocks fall, the reality is that the shutdown will likely not affect the U.S. economy at all -- at most a very small amount for a short period of time. And before average investors start getting too worked up about the consequences of what may or may not happen, remember that we have been here before.

Since there are a lot of great buying opportunities out there today, let's take a look at a couple of stocks that are moving lower based on individual company news but may still represent a buying opportunity. 

Shares of Coca-Cola (KO -0.73%) are down 1.29% today after Interbrand announced that the soft-drink company had been ousted as the world's most valuable brand. The beverage company now has a brand worth $80 billion, but Apple (AAPL -0.20%)took the No. 1 spot as its brand worth rose 28% to $98 billion over the last year. As I mentioned above, the market as a whole is moving lower based on news that doesn't directly affect its business; the same could be said about Coke today. While the actual worth of the brand is important in terms of name recognition, it isn't going to have a negative impact on Coke's business simply because Apple is now the top dog. That said, if we see Coke begin to fade and its brand worth decline, the argument could be made that the company as a whole is worth less and sales will further deteriorate in the future. However, we are certainly not yet at that point, and investors should not be selling based on this news today.  

Another Dow loser today is Boeing (BA 0.95%), down 1.17% based on a technical problem with a 787 Dreamliner yesterday, making today's move perhaps not warranted. On Sunday, a 787 flying to Poland had to make an emergency stop in Iceland due to a fault with the antenna that transmits the plane's identification information. The glitch arose as Boeing is attempting to prove to customers and air passengers that its 787 is a reliable and safe airplane that has had just a few growing pains in the past. And although the problem on Sunday was significant enough to force an emergency landing, investors need to remember that these sorts of things happen all the time and don't make world news. A continuing series of similar problems on other 787s would be cause for concern, but it is too early for investors to worry.  

Fool contributor Matt Thalman owns shares of Apple. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513

The Motley Fool recommends Apple and Coca-Cola. The Motley Fool owns shares of Apple. 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.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$32,860.23 (0.17%) $56.76
Apple Inc. Stock Quote
Apple Inc.
$165.02 (-0.20%) $0.33
The Boeing Company Stock Quote
The Boeing Company
$166.60 (0.95%) $1.56
The Coca-Cola Company Stock Quote
The Coca-Cola Company
$62.92 (-0.73%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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