Markets are having a gray Monday morning, as both the Dow Jones Industrial Average (^DJI -0.98%) and the S&P 500 linger below the green line. They're both likely very jittery about a pending government shutdown set to happen at the end of the day, since any political give-and-take now seems out of the question.
The Dow stumbled badly earlier, dropping by more than 160 points, but has since rallied a bit, and by late morning was hovering at a 100-point loss from the opening. A little piece of good news interjected itself mid-morning: The Chicago Business Barometer gained 2.7 points in September, settling at 55.7, compared to its prior reading of 53 and market expectations of 53.7. The gain is attributed to stronger production, new orders, and deliveries, though employment fell slightly.
Still, the budget battle and looming government shutdown will likely dominate the market atmosphere today. The Senate won't take up the budget discussion again until 2 p.m. EDT today, and divisions between the House, which refused to pass the Senate's stopgap bill on Friday, and the Senate, are at an all-time high. The House wants to see President Barack Obama's Affordable Health Care Act defunded -- or, at least postponed for a year -- something that the Senate won't abide.
With all the uncertainty, it's not surprising that markets are roiling. If the shutdown occurs, it would be the first time since 1995 -- which means no one is really sure what its ramifications might be. While Moody's Mark Zandi opines that a three-to-four-week shutdown could cost the economy 1.4 percentage points in the fourth quarter, other sources quote a much smaller hit of 0.3 percentage points for a two-week hiatus. For the markets, it is probably the fear of the unknown that is responsible for the dour outlook this morning.
Few winners in the lineup today
It's been tough finding any Dow winners today, and though Wal-Mart (WMT 0.57%) started out strong, it has plunged more than 0.5% since midmorning. The big-box retailer has been stung by reports that it has cut orders to supply its stores going into the all-important holiday shopping season, and the company has again filed an extension for its equity conversion date with partner Bharti Retail in India. This is the third extension, and investors may be wondering when Walmart's $100 million investment in that country will begin to take root.
The only stock in positive territory as the noon hour approaches is Cisco (CSCO -0.52%), which is up almost 0.5%. The stock may have gotten a boost from the news earlier today that the tech giant has partnered with Portugal Telecom to deliver Smart + Connected City Wi-Fi services to parts of Europe, Latin America, and Africa.
