The leaders in the Senate suspended their negotiations to end the government shutdown and to raise the debt ceiling to prevent default. As a result, investors became less optimistic that the issues will be resolved, which drove the U.S. stock market to plummet.

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According to Senate Majority Leader Harry Reid, the proposal submitted by the Republican House leaders cannot and will not pass in the upper chamber. He expressed his disappointment with House Speaker John Boehner for trying to preserve his leadership in the lower house at the expense of the country. He warned that the United States’ credit rating could suffer another downgrade as soon as tonight.  President Barack Obama is meeting the Democratic leaders at the White House today.

Kevin Caron, market strategist at Sitifel Nicolaus & Co. told Bloomberg, “The knee-jerk reaction will be to sell on any kind of bad news. The market is looking for progress, so anything that’s not indicative of progress, the answer’s going to be shoot first and ask questions later.”

On the other hand, Richard Fisher, president of the Federal Reserve Bank of Dallas said that there would be no tapering on the $85 billion bond-buying program due to the current budget standoff in Washington.

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 15, 168.01 (-0.87%)
  • S&P 500- 1,698.06(-0.71%)
  • NASDAQ- 3,794.01 (-0.56%)
  • Russell 2000- 1,079.92 (-0.95%)

European Markets

  • EURO STOXX 50 Price EUR- 3, 004.56 (+0.90%)
  • FTSE 100 Index- 6,549.11 (+0.64%)
  • Deutsche Borse AG German Stock Index DAX- 8,804.44 (-0.01%)

Asia Pacific Markets

  • Nikkei 225- 14,441.54 (+0.26%)
  • Hong Kong Hang Seng Index- 23,336.52 (+0.51%)
  • Shanghai Shenzhen CSI 300 Index- 2, 467.52 (-0.20%)

Stocks in Focus

The stock price of Charles Schwab Corp (NYSE:SCHW) surged to as much as $23.79 per share today after reporting financial results that outperformed the consensus estimates of Wall Street analysts. The company posted $290 million net income, or $0.22 diluted earnings per share, and $1.37 billion revenue.  Charles Schwab’s earnings are higher than the $0.20 earnings per share consensus estimate.

FedEx Corporation (NYSE:FDX) traded to an all time high at $122.50 a share after disclosing its plan to repurchase 32 million shares (or 10%) of its 317 million outstanding stocks. In a statement, FedEx chairman Frederick Smith said, “The stock buyback plan reaffirms our confidence in the company’s strategy and long-term growth potential. It also demonstrates our ongoing commitment to delivering value to our share-owners.” As of this writing, the shares of the company are trading around $120.22 per share, up 4.29%.

The stock value of FLIR Systems, Inc. (NASDAQ:FLIR) tumbled 13.79% to $28.59 per share after the company released a preliminary earnings report that is lower than the consensus estimate of Wall Street analysts. The company also revealed its plan to realign its global operations by shutting down six not-to-scale facilities in Europe and United States. It will transfer its operations from those sites to larger sites. Flir Systems expects to deliver around $0.32 to $0.33 earnings per share compared with $0.37 consensus estimate for the third quarter.

Meanwhile, Teradata Corporation (NYSE:TDC) declined 18.37% to $42.92 per share after the company released a earnings guidance in the range of $0.609 to $0.70 per share for the third quarter, which is lower than the $0.81 earnings per share consensus estimate. According to the company, its revenue in Asia declined by 21%, while its sales performances in Africa and Middle East fell by 19%.