Stocks ended lower on Monday, marking the second consecutive day of significant losses as markets brace themselves for what could be weeks of political gridlock over the US budget and debt ceiling.
It is a week that not long ago would have begun with rampant speculation about the results of the Federal Open Market Committee meeting that concludes on Wednesday, along with trade and jobs data. But the nearly year-long speculation about the Fed’s next move on fiscal stimulus has become almost completely eclipsed by the even more obscure nature of today’s Washington politics, where a small minority in the House of Representatives looks for all intents and purposes to be making hay out of what had been a traditionally non-political matter.
The possibility that the White House would be willing to accept a short-term raising of the debt ceiling was the only promising news item on the day, but did little to assuage market fears. All of this comes as at potentially great costs to the economy, with Equities.com’s George Brooks arguing that in the event that the upcoming October 17 deadline for a deal is missed, the Dow could drop below 13,000 points in a very short period of time.
The Standard & Poor’s 500 index dropped 0.85 percent to close the day at a total of 1,676.12 points, while the Dow Jones Industrial Average took a loss of 0.90 percent to finish at 14,936.24, and the NASDAQ ended at 3,770.38 points for a loss of 0.98 percent.
On the S&P 500, services and basic materials stocks took the heaviest losses, with Urban Outfitters Inc. (URBN) , Abercrombie & Fitch Co. (ANF) , and Gannett Co. (GCI) shedding over 3 percent each, while Eastman Chemical Co. ($EMN), CONSOL Energy (CNX) and Nabors Industries (NBR) were also lower.
On the Dow, tech stocks were the only to end the day in the positive, with AT&T Inc. (T) , Verizon Communications (VZ) , and Intel (INTC) edging up to end the day. Meanwhile, financial stocks were the index’s worst performers, as Visa Inc. (V) and American Express Company (AXP) both ended the day lower.
The NASDAQ saw shares for BlackBerry (BBRY) jump nearly 4 percent on news that a number of major tech companies were interesting in its attempt to sell itself. Meanwhile, biopharma company Cell Therapeutics (CTIC) ended the day nearly 23 percent higher on news that one of its treatments had been approved by the FDA.