Washington Budget Battle Takes Toll On Stocks - U.S. Commentary
Shares dropped at the outset of trading as the deadline for a spending deal came into view. There was a moderation during the mid-morning, but stocks slipped back toward their lows of the day during the afternoon.
The Dow Jones Industrial Average eventually finished lower by 128.57 points, or 0.8 percent, closing at 15,129.67. The Nasdaq retreated 10.12 points, or 0.3 percent, to end at 3,771.48. The S&P 500 slipped 10.20 points, or 0.6 percent, to finish at 1,681.55.
Congress continues to wrangle over a spending bill. Without a last-minute deal, many federal government operations are scheduled to shut down at midnight due to lack of funds.
The Senate rejected a bill that would have financed operations until mid-December. The bill, passed over the weekend by the Republican-dominated House of Representatives, also called for a one-year delay in the implementation of the health care reform bill, major provisions of which are set to go into effect tomorrow.
Though it was overshadowed by the worries about the budget fight in Washington, some fresh economic statistics came out today. Industry data released this morning showed that manufacturing activity in the Chicago area experienced improved growth in September.
Specifically, the Chicago Purchasing Managers index rose to 55.7 compared to a reading of 53.0 in August. Any ready above 50 indicates expansion in the sector. The Chicago PMI is considered one of the most important regional manufacturing reports.
Japan's Nikkei index fell over 2 percent to end at its lowest level in about two weeks. The index dropped about 304 points, or nearly 2.1 percent.
Hong Kong's Hang Seng index retreated 347 points, or 1.5 percent. There were also losses in South Korea and Australia. China bucked the overall trend in the region, with the Shanghai composite edging up 0.7 percent.
Shares lost ground in Europe as well. The U.K.'s FTSE 100 index dropped 50.44 points, or 0.8 percent, to finish at 6,462.22. Germany's DAX index retreated 67.11 points, or 0.8 percent, to end at 8,594.40. France's CAC 40 index slipped 43.33 points, or 1 percent, to close at 4,143.44.