Heading into the final hour of stock trading in New York, the Dow was down 0.6% at 15,100, having been down close to 1% earlier in the day. The S&P 500 was down 0.28% and the NASDAQ 100 had recovered all the way to being flat on the day.
The partial shutdown of the US government is now proceeding towards a third day with no signs of a resolution, despite Senate Majority leader Harry Reid offering budget talks to House Speaker John Boehner, meaning Friday’s non-farm payrolls is under threat of being delayed.
Even if Congress is able to agree on a spending bill in order to curtail the shutdown, the more important issue of the debt-ceiling negotiations still awaits. The consequences of failing to act in a timely manner there will be far more detrimental to the US economy (not to mention the global economy) than the shutdown.
We will have data tomorrow from the Institute Supply Management with their non-manufacturing index, which attempts to gauge activity at a wide cross-section of businesses. A reading of 57.0 is expected, which although slightly lower than August’s recover-high level of 58.6, would still be a strongly expansionary result.