Markets Flat on Opening After Government Shutdown
Oct. 1, 2013 — -- American investors responded with a shrug to the first government shutdown in 17 years.
At the opening bell on Tuesday, the Dow Jones Industrial average rose less than one percentage point to 15,141. The Nasdaq and S&P 500 advanced 0.16 percentage points to 3,778 and 1,684, respectively. By mid-day, the Dow had risen 76 points, or 0.47 percent, and the other indexes posted similar gains.
Guy LeBas, Janney Capital Markets' managing director of fixed income strategy, wrote in a research note that his "base case expectation" is that the government shutdown will last for several days before being revolved.
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About 800,000 employees of the federal government's 2.9 million are expected to be sent home.
LeBas said the shutdown will have "substantial" economic costs. Mark Zandi of Moody's Analytics estimates that a three- to four-week shutdown could shave 1.4 percentage points off fourth quarter GDP growth, Bloomberg reports. The defense and housing sectors may be more acutely affected by the shutdown.
The Labor Department may not release its monthly jobs report this Friday because of the shutdown. Meanwhile, the Securities and Exchange Commission is expected to continue handling corporate securities filings and emergency enforcement issues, the Wall Street Journal reports.
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