U.S. Shutdown Impact Global Stocks Fall

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U.S. Shutdown Impact Global Stocks Fall
U.S. Shutdown Impact Global Stocks Fall

U.S. Shutdown Impact Global Stocks Fall

Despite a better performance of equities on Tuesday on hopes, the first partial shutdown of the U.S. government finally impacted Wednesday’s trading and the U.S. stocks fell across sectors. Investors were in a jolly mood on the first day of the shutdown, as there did not seem any impact in the stock market; however, this did not survive long.

Now that congressional leaders and President Barack Obama are going to meet in the White House to discuss the budget impasse and raise the U.S. debt limit, things may turn better.

According to market analysts, the downward movement of stock performance was due to the fact that the concerns about the economic impact grew yesterday as no signs emerged of an end to the budget standoff in Washington and investors are worried about the standoff. In worse trading days, all ten S&P 500 sectors were lower.

Consumer staples stocks were the weakest, e.g. Dow component Coca-Cola was one of the worst performers as it fell by 1.3 percent to $37.47. Whereas the Dow Jones industrial average was down 67.49 points and closed at 15,124.21, the Standard & Poor’s 500 Index fell by 2.81 points and closed at 1,692.19.

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Similarly, the Nasdaq Composite Index was down 0.58 points and closed at 3,817.40. A large number of companies from mobile makers to agribusiness faced heavy losses. BlackBerry Ltd which is already in trouble fell to an 11-month low and its shares were down 4 percent and closed at $7.85.

Monsanto Co too slid in yesterday’s trading which can be attributed to its fourth-quarter loss that was bigger than expected. Investors were seen selling the company’s stock as it does not offer bright prospects even next year. In a dismal trading day yesterday, its shares fell 2.7 percent to $102.21.

On a volatile trading day the Chicago Board Options Exchange Volatility Index rose 6.8 percent to 16.60. The organization announced that it will launch a new short-term volatility index covering just nine days as it puts developments of more risk gauges for investors at the heart of its expansion plans.

Global Impact of the U.S. Shutdown

It was not just the U.S. stock that fared worse; the U.S. shutdown had a global impact, MSCI’s world equity index, fell 0.13 percent to 384.12 points. The FTSEurofirst 300 index of top regional shares also closed at 1,247.14 after losing 0.7 percent. Similarly, the euro zone’s blue-chip Euro STOXX 50 index was down 0.5 percent and closed at 2,918.31.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com