Dow finishes September on a low note

After a strong start to the month, the end of September has not been good for the stock market, with last week being the first losing week for the S&P 500 since early August.

The final day of the month has seen losses across the board, with the Dow down almost 1% at 15,109 with an under an hour to the close in New York.

Despite the weak finish, stocks remain up for the month of September.

The Senate today rejected a bill from the House of Representatives that proposed delaying Obamacare, and in its place sent back an emergency funding bill, ‘clean’ of conditions, for the House to consider. There are just hours left now to avoid a partial government shutdown, which would be the first since 1995-96.

Separately, legislation is also required to raise the debt limit in order to allow the US Treasury to borrow freely for another year. Republicans are likely to carry on their battle against Obamacare in these discussions. The Treasury estimates that its current extraordinary measures, by which it has ensured the government can pay its bills despite the borrowing limit having been hit since May, will be exhausted by 17 October.

Standard & Poor today said that the debt ceiling debate is unlikely to affect its rating of US sovereign debt. ‘In our opinion, the current impasse over the continuing resolution and the debt ceiling creates an atmosphere of uncertainty that could affect confidence, investment, and hiring in the US,’ the company said. ‘However, as long as it is short-lived, we do not anticipate the impasse to lead to a change in the sovereign rating.’

Tomorrow we have the PMI manufacturing index along with ISM manufacturing, which should give us the clearest indications for how manufacturing has been faring in September. Regional surveys have been giving mixed results: today’s Dallas Fed survey showed strong expansion, but some other regions have been far less encouraging.

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