Investors are becoming increasingly concerned with the ongoing debate in Congress regarding the federal budget and debt ceiling. Many are worried that lawmakers will not be able to strike a deal to prevent the looming government shut down. As a result, the stock markets in the United States extended their losing streak. The on-going political wrangling in Washington also drove Asian stock markets down.
Republican lawmakers continue to disagree with the White House in terms of spending cuts and other significant issues in the federal budget. President Barack Obama wants the Congress to increase the debt ceiling without conditions. On the other hand, Republicans argue that an increase in the debt ceiling must be accompanied by an equal amount of spending cuts.
The United States government is set to reach its debt ceiling on October 1st. If Congress fails to increase the limit, the government will not be able to pay its obligations. Treasury Secretary Jacob Lew informed the members of the Congress that the extraordinary measures being utilized by the government to prevent breaking the debt ceiling “will be exhausted no later than October 17.”
In an interview with Bloomberg, Don Hodges, founder of Hodges Funds commented, “There is a lot of noise that’s disruptive to people doing anything with a great deal of confidence. Anytime the market is as strong as it’s been in the last few weeks, you just know that it’s capable of having a pullback that shakes off a people a little bit.”
- Dow Jones Industrial Average (DJIA)- 15,276.98 (-0.38%)
- S&P 500- 1,693.27 (-0.24%)
- NASDAQ- 3,762.62 (-0.15%)
- Russell 2000- 1,075.40 (+0.07%)
- EURO STOXX 50 Price EUR- 2, 927.35 (+0.15%)
- FTSE 100 Index- 6,551.53 (-0.30%)
- Deutsche Borse AG German Stock Index DAX- 8,665.63 (+0.01%)
Asia Pacific Markets
- Nikkei 225- 14, 620.53 (-0.76%)
- Hong Kong Hang Seng Index- 23,209.63 (+0.13%)
- Shanghai Shenzhen CSI 300 Index- 2, 492.03 (-0.61%)
Stocks In Focus
The stock price of J.C. Penney Company, Inc. (NYSE:JCP) declined by 15% to $10.12 per share after an analysts warned that the beleaguered century old department store chain is on the brink of bankruptcy. Yesterday, Goldman Sachs analyst, Kristen McDuffy noted that J.C. Penney might experience liquidity problems in the third quarter because of weak fundamentals, inventory rebuilding, and the underperformance of its home department.
Tesla Motors Inc (NASDAQ:TSLA) gained to as much as $186.29 per share, but ended the trading at $185.30 per share, up by 1.63%. The stock traded higher today after Hertz Global Holdings, Inc. (NYSE:HTZ) announced its plan to add the electric car manufacturer’s Model S sports sedans to its higher-end rental vehicles in San Francisco and Los Angeles. According to the rental car company, Tesla’s Model S will be added to its Dream Cars service.
The stock value of Mako Surgical Corp. (NASDAQ:MAKO) surged by more than 82% to $29.46 per share after reports that it will be acquired by Stryker Corporation (NYSE:SYK) for $30 per share or $1.65 billion. On the other hand, the shares of Stryker declined by 2.88% to $68.79 a share.
Carnival Corporation (NYSE:CCL) declined by 5.33% to $32.70 per share after the largest cruising company reported disappointing third quarter financial results. Its net profit declined by 30% to $1.20 per share.