The stock markets in the United States experienced massive a sell off as investors prepare for a potential shutdown of the federal government as lawmakers are still negotiating to pass a budget before the deadline on Monday midnight.

market news Morning News

Republican House Speaker John Boehner is urging the Democrats legislators in the Senate to approve the budget bill passed by the lower chamber on Sunday morning, but the passage of the bill in the upper chamber is uncertain because it includes a provision that would delay the implementation of ObamaCare. Democrats vowed that they would not pass any bill that would defund or disrupt the health care law.

The Senate voted 54-46 rejecting the new proposal of the House, which means the pressure in preventing the government shutdown returned to the members of the lower chamber.

In an interview with Bloomberg, Michael James, managing director at Wedbush Securities commented, “We are at the mercy of whatever develops in Washington. An attempt to prevent a shutdown is not totally unexpected, but some agreement will be better than none.”

If the lawmakers fail to negotiate and approve an emergency legislation that would keep government operations, approximately 800,000 Federal employees will be placed on a temporary unpaid leave.

Economist at Morgan Stanley estimated that the quarterly growth of the gross domestic product (GDP) of the United States would decline by 0.15 percent for one week of a government shutdown. In the second quarter, the U.S GDP growth rate was 2.5 percent based on the latest data released by the government.

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 15,129.67 (-0.84%)
  • S&P 500- 1,681.55 (-0.60%)
  • NASDAQ- 3,771.48 (-0.27%)
  • Russell 2000- 1,073.53 (-0.06%)

European Markets

  • EURO STOXX 50 Price EUR- 2, 893.15 (-0.90%)
  • FTSE 100 Index- 6,662.22 (-0.77%)
  • Deutsche Borse AG German Stock Index DAX- 8,594.40 (-0.77%)

Asia Pacific Markets

  • Nikkei 225- 14, 455.80 (-2.06%)
  • Hong Kong Hang Seng Index- 22,859.86 (-1.50%)
  • Shanghai Shenzhen CSI 300 Index- 2, 409.04 (+0.59%)

Stocks In Focus

The stock price of Active Network Inc (NYSE:ACTV) surged by more than 25% after the company announced its agreement to be acquired by private equity firm, Vista Equity Partners for $1.05 billion, or $14.50 per share, in an all-cash transaction. Active Network provides software used by companies and other entities in managing events and other corporation functions. The share of Active Network ended the trading session at $14.31 per share on Monday.

Brookfield Office Properties Inc (NYSE:BPO) gained 13.71% to $19.07 per share after confirming that Brookfield Property Partners LP (NYSE:BPY) offered to acquire the 49% stake it does not yet own in the company for $5 billion or $19.34 in cash and stock. Brookfield Office formed a special committee to evaluate the proposal. Both companies are subsidiaries of global investment management firm, Brookfield Asset Management Inc.(NYSE:BAM) (TSE:BAM.A).

The Coca-Cola Company (NYSE:KO) dropped by 1.35% to $37.88 per share due to concerns of a looming government shutdown. The beverage company lost its position as the most valuable brand based on the latest study from Interbrand, one of the leading brand consultancy firms.

The shares of The Procter & Gamble Company (NYSE:PG) declined by 2.1% to $75.59 per share, after Unilever N.V. (NYSE:UN) warned that the market growth of many emerging countries are slowing down. The stock price of Unilever also fell by 3.36% to $37.72 per share due to its warning.