Stocks drop as government heads toward shutdown
NEW YORK (AP) — The U.S. stock market dropped early Monday as it became all but certain that the federal government would partially shut down for the first time in 17 years.
In the first 15 minutes of trading, the Dow Jones industrial average dropped 142 points, or 0.9 percent, to 15,124. The Standard & Poor's 500 slid lost 12 points, or 0.7 percent, to 1,680 and the Nasdaq composite dropped 34 points, or 0.9 percent, to 3,748.
Selling was broad in early trading as all 30 companies in the Dow fell.
Wall Street's attention is on Washington. Congress and the White House have not reached an agreement to pass what's known as a continuing resolution to fund the government, with only hours before the midnight deadline. If the government does partially close, it would be the first time since the 21-day government shutdown under President Bill Clinton from late December 1995 to January 1996.
Political brinksmanship, particularly the type between the White House and the Republican-controlled House of Representatives, is old news for Wall Street traders. The last several budget and debt-ceiling debates between the Obama administration and Republican-controlled House of Representatives have gone until the last minute, with legislation often passing with only hours to spare.
Investors have said they expected volatility over the next few weeks because of the shutdown and upcoming debate over the debt ceiling.
As long as the shutdown is not prolonged, any volatility should be temporary. The bigger worry is the problem with the debt ceiling, investors said.
Treasury Secretary Jack Lew said last week that the federal government would run out of borrowing authority by roughly Oct. 17. The last time the debt ceiling issue came up in August 2011, it led to Standard & Poor's downgrading the United States' credit rating and the Dow went through nearly three weeks of nauseating triple-digits moves almost daily.