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Debt ceiling fears hurts stocks
October 2, 2013: 4:29 PM ET
Click chart for more markets data.
NEW YORK (CNNMoney)
It's day 2 of the government shutdown. And now investors have become more nervous about the ramifications of the political stalemate in Washington.
The Dow, the S& P 500, and the Nasdaq closed Wednesday with modest losses, pulling back from steeper drops in morning trading. Stocks rallied on Tuesday, the first day of the shutdown.
The biggest worry now: the potential for a government default on October 17. If Congress fails to raise the debt ceiling, the U.S. government will be unable to pay all of its bills later this month.
Treasury Secretary Jack Lew said Tuesday that the government has started to use the last of its " extraordinary measures" to ensure it stays below debt ceiling.
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With Congress unable to agree on a deal to fund the government past Monday, more than 800,000 federal workers are being furloughed without pay this week. In addition, government agencies are curtailing their services, and federal museums, parks and monuments are closed to the public.
Quantitative strategists at Bank of America Merrill Lynch noted in a report that previous shutdowns have been mostly positive for the stock market. But the big difference this time around is the rapidly approaching debt ceiling.
Investors reacted to economic news as well. Payroll processor ADP's monthly report on private-sector jobs showed that the U.S. added 166,000 jobs in September, slightly below expectations. The report has more significance this month than usual. It appears increasingly unlikely that the U.S. government's monthly employment report will be released this Friday because of the government shutdown.
Related: Federal workers sound off on the shutdown
World Markets
North and South American markets finished lower today with shares in Brazil leading the region. The Bovespa is down 0.15% while Mexico's IPC is off 0.08% and U.S.'s S& P 500 is lower by 0.07%.
North and South American Indexes
| Index | Country | Change | % Change | Level | Last Update | |
|---|---|---|---|---|---|---|
 |
Dow Jones Industrial Average | United States | -58.56 | -0.39% | 15,133.14 | 4:35pm ET |
| |
S& P 500 Index | United States | -1.13 | -0.07% | 1,693.87 | 4:35pm ET |
| |
Brazil Bovespa Stock Index | Brazil | -79.28 | -0.15% | 53,100.18 | 6:03pm ET |
| |
Canada S& P/TSX 60 | Canada | -0.83 | -0.11% | 736.05 | 4:20pm ET |
| |
Santiago Index IPSA | Chile | -28.90 | -0.88% | 3,245.16 | 3:23pm ET |
| |
IPC | Mexico | -34.61 | -0.08% | 41,300.66 | 6:06pm ET |
