Stocks dropped across the board to begin the week as investors braced themselves for appears to be the very real possibility of a government shutdown.
The Standard & Poor’s 500 index was 0.60 percent lower to 1,681.55 by the closing bell, while the Dow Jones Industrial Average ended the day 0.87 percent lower at 15,129.67, and the NASDAQ was off considerably less, shedding only 0.27 percent to 3,771.48 points.
Republicans in the House of Representatives offered a “compromise” plan over the weekend centered on a one-year delay in the full implementation of President Obama’s signature 2010 Patient Protection and Affordable Care Act, better known as Obamacare. This gambit is almost certain to be rejected by the Senate, however, and with no alternatives on the table for the moment, many fear a shutdown is imminent.
The situation is further complicated by the fact that shutdown or no, the current debate will be followed immediately by what is sure to be at least as bitter partisan wrangling over the raising of the nation’s debt ceiling that allows the government to pay its bills. The debt-ceiling debate is particularly worrisome for the reason that, unlike the government shutdown which has a historical precedent in a similar event during the second term of President Bill Clinton in 1995, a failure to raise the debt-ceiling could have unexpected consequences on a domestic and global scale.
Amid all of the anxiety and politicking, the S&P 500 was dragged lower by financial and tech stocks. Bank of America (BAC) , Citigroup (C), and Well Fargo & Company (WFC) all ended the day lower on heavy trading, as did Intel Corporation (INTC), Oracle (ORCL) and Frontier Communications Corporation (FTR) .
All but two of the Dow’s components ended the day lower, with consumer goods companies bearing the brunt of the sell-off. Procter & Gamble Co. (PG) , Nike Inc. (NKE) , and The Coca-Cola Company (KO) were among the day’s worst performers. Two tech shares were spared, with Cisco Systems Inc. (CSCO) and Microsoft Corporation (MSFT) edging ever-so-slightly up by closing.
On the NASDAQ, social-media techs created a great deal of downward pressure. Facebook Inc. (FB), Zynga Inc. (ZNGA), Yahoo! Inc. (YHOO), and Groupon Inc. (GRPN) were all lower on heavy trading. Apple Inc. (AAPL) also contributed, on a loss of 1.25 percent.