U.S. Stock-Index Futures Fall on Second Day of Shutdown U.S. stock-index futures fell, after the Standard & Poor’s 500 Index rallied the most in almost two weeks, as the government shutdown entered a second day with no talks scheduled between the White House and Congress. Alcoa Inc. (AA) slumped 3.4 percent in pre-market New York trading after Deutsche Bank AG lowered its rating on the aluminum producer. Exxon Mobil Corp. and McDonald’s Corp. led declines among the biggest U.S. companies. S&P 500 futures expiring in December lost 0.7 percent to 1,677.7 at 11 a.m. in London. The benchmark gauge for U.S. equities climbed 0.8 percent yesterday, after falling for two trading sessions. The S&P 500 (SPX) has still surged 19 percent so far this year. Contracts on the Dow Jones Industrial Average decreased 84 points, or 0.6 percent, to 15,036 today. “If the shutdown is only for one or two days, it’s not a problem, but if you have a long discussion around the budget, it could be a problem,” Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA in Luxembourg, said by telephone. “You can expect some consolidation in markets because the rally was impressive during the summer.” The U.S. government began its first partial shutdown in 17 years yesterday as Republicans and Democrats failed to agree on a compromise budget to keep the federal government open into the new financial year. As many as 800,000 federal employees didn’t work and the government closed some services. Day one of the shutdown wrapped up with no talks scheduled between the White House and Congress, making it more likely the standoff would merge with the fight over raising the U.S. debt limit later this month to make sure the government can pay all its bills. Debt Limit The U.S. has begun final steps to avoid breaching its debt limit, Treasury Secretary Jacob J. Lew said, urging Congress to raise the borrowing authority “immediately” in a letter addressed to House Speaker John Boehner. Lew repeated that the measures will be exhausted no later than Oct. 17. Companies in the U.S. added 180,000 people to payrolls in September, according to the median estimate of economists surveyed by Bloomberg before a report from the ADP Research Institute due at 8:15 a.m. New York time. Firms hired 176,000 workers in August, according to ADP. The Labor department won’t release its monthly jobs report on Friday if the federal government remains closed, according to the Bureau of Labor Statistics. In Italy, Prime Minister Enrico Letta faces a confidence vote today. He needs support from some members of Silvio Berlusconi’s People of Liberty party to save his government. Alcoa slumped 3.4 percent to $7.89. Deutsche Bank reduced its recommendation to sell from hold, citing the outlook for lower aluminum prices. Exxon Mobil, the world’s biggest energy company by market value, slid 0.3 percent to $85.77 in pre-market New York trading. McDonald’s, the largest restaurant chain by sales, fell 0.2 percent to $95.90.
Posted on: Thu, 03 Oct 2013 15:41:02 +0000