Wall Street lurches with just hours to shutdown

US shares have pared their losses as the day has progressed, but the major indices remain down substantially as the US government moves ever closer to a partial shutdown with no resolution to the budget wrangles in sight.

By early afternoon in New York, the Dow was down 83 points or 0.55% at 15,174, while the S&P 500 slipped 0.37% to 1685.5. Losses earlier in the day had been even more pronounced, though, with the Dow at one point trading as low as 15, 086, representing a drop of more than 170 points.

President Obama says he is not resigned to a shutdown, but time is now in very short supply and with Republicans and Democrats having demonstrated just how stubborn they can be with their lack of progress in the last few weeks, it seems a longshot that things will get resolved before the midnight deadline.

If you closely follow economic data, you may notice disruption almost immediately in the event of a partial government shutdown: the Commerce Department will suspend its economic reporting, meaning tomorrow’s scheduled construction spending data for August would not be released.

More importantly, it would mean no non-farm payrolls report on Friday, one of the most highly-anticipated economic released in the monthly calendar.

Worries over the shutdown, which could see up to one million government employees put on unpaid temporary leave, are pressuring the US dollar, with GBP/USD rising 0.35% and EUR/USD up 0.07%.

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