US stocks ease as budget fight continues
NEW YORK: US stocks on Monday finished lower as a partial US government shutdown entered its second week with no sign of resolution.
The Dow Jones Industrial Average fell 136.34 points (0.90 percent) to 14,936.24. The broad-based S&P 500 tumbled 14.38 points (0.85 percent) to 1,676.12, while the tech-rich Nasdaq Composite Index gave up 37.38 points (0.98 percent) at 3,770.38.
The paralysis in Washington continued to weigh on markets. Analysts have expressed particular concern that the fight over the budget will stymie efforts to raise the budget ceiling, resulting in a US default with damaging economic consequences.
However, the market still considers a US default unlikely, said Peter Cardillo, chief market economist at Rockwell Global Capital.
"If the markets were really fearful of a default.... we wouldn't be down a half a percent or three-quarters of a percent," Cardillo said. "We would be down a heck of a lot more."
Banking equities were among the hardest-hit. Dow component JPMorgan Chase fell 1.6 percent, Citigroup dropped 2.0 percent and Wells Fargo dipped 1.7 percent.
Dow component Boeing dropped 0.4 percent after Japan Airlines announced a massive US$9.5 billion aircraft order with competitor Airbus. The decision challenged Boeing's dominance in the Japanese market.
Dow component IBM took a 1.1 percent hit after Barclays downgraded the stock to "equal weight" due to the lack of near-term catalysts for the stock.
Other technology companies also suffered, including Microsoft (down 1.7 percent), Amazon (down 2.8 percent), Priceline (down 1.9 percent) and eBay (down 1.8 percent).
An exception was Apple, which advanced 1.0 percent after Jefferies upgraded the stock to "buy" following meetings with Asian suppliers who were enthusiastic about upcoming Apple products.-- AFP