Wall Street Steepens Losses on Day Three of Shutdown

Michael Teague |

After the previous trading session’s retreat, stocks ended sharply lower on Thursday, as investors seem to be coming around to the accepted view that elected officials in Washington, D.C. will not be soon in resolving their differences over the nation’s budget, as well as the upcoming battle over the debt ceiling.

The situation was perhaps best summed-up by Equities.com contributor George Brooks, who earlier in the day wrote that “The Street is taking this crisis too lightly, confident a deal will be struck, just because failure to do so would roil financial markets worldwide…But, the Street may have it wrong this time. How do you program all those Wall Street computers to make sense about what is happening in Washington?  Not even a computer would believe it.”

Thursday’s economic data consisted of the weekly jobless claims report that indicated the number of people filing for first-time jobless benefits during the previous week was lower than expected at 308,000. Jobless claims overall are at six-year lows, but the shutdown could change this scenario as more and more government workers are furloughed.

Meanwhile, the ISM services index that tracks non-manufacturing activity in the US dropped from 58.6 in August to 54.4 for the month of September, well below expectations of a reading of 57, indicating that growth in the US services sector has slowed substantially over the last month.

The Standard & Poor’s 500 index dropped 0.90 percent to 1,678.66 points, while the Dow Jones Industrial Average was also off by 0.90 percent, dipping below 15,000 to hit 14,996.48 points, and the NASDAQ was 1.07 lower, closing at 3,774.34 points.

Healthcare stocks ended lower on the S&P, with steep losses for Biogen Idec Inc. (BIIB) and Eli Lilly & Co. (LLY) , while services stocks also lagged, with drops from Netflix (NFLX) and The Washington Post Company (WPO) .

All but one of the Dow’s components ended the day in the red. Boeing (BA) , Chevron (CVX) , and E.I. du Pont de Nemours (DD) were all off over 2 percent, while Verizon Communications (VZ) was the only stock to advance at all during Thursday trading.

On the NASDAQ, tech shares created significant downward pressure, with Facebook Inc. (FB) and Groupon (GRPN) dropping sharply, and Angie’s List (ANGI) off over 17 percent ahead of the close after the company’s announcement that it was cutting membership fees shook shareholder confidence.

 

 

[Image Courtesy of Flickr Creative Commons]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ANGI Angie\'s List Inc. 8.46 0.86 11.32 595,253
BA Boeing Company (The) 136.30 1.45 1.08 3,568,298
BIIB Biogen Inc. 287.08 0.04 0.01 572,747
CVX Chevron Corporation 102.15 -0.53 -0.52 2,696,355
DD E.I. du Pont de Nemours and Co. 68.93 -0.23 -0.33 980,692
FB Facebook Inc. 121.93 0.71 0.59 18,241,440
GDWWF Goodwin PLC n/a n/a n/a 0
GRPN Groupon Inc. 3.79 -0.12 -3.07 5,045,648
LLY Eli Lilly and Company 82.98 0.89 1.08 1,592,701
NFLX Netflix Inc. 90.80 -0.61 -0.66 4,659,750
VZ Verizon Communications Inc. 55.11 0.30 0.54 9,137,386

Comments

Emerging Growth

Gold Reach Resources Ltd.

Gold Reach Resources Ltd is engaged in the acquisition, exploration and development of mineral properties in British Columbia.

Private Markets

Wealthfront

Wealthfront is an automated investment service that serves as an alternative to traditional financial advisory services. The company manages a diversified, continually rebalanced portfolio of index funds on their clients’…

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…