The U.S. stock market fell on Wednesday amid the concerns that the stalemate for the debt ceiling problem is not solved yet by the government and policy makers. The investors are weighing other options where they could invest in and are concerns about the consequences that of deadlock of a government shutdown on the market.
It has been two days already since the government shutdown and the federal government employees are having a tough time to realize what is up for them in the near future, as a decline in payrolls would probably be one of the consequences.
Wall Street and 2 Hanging Swords
The S&P 500 index fell to the 1673 level yesterday after which it took a little bullish correction and is currently hovering at the 1680 level; however, it would remain a bounty for the sellers if it stays below the 1703 level.
The investors are trying to figure out the seriousness of this current situation and how this could impact their investments, no matter which sector it is in. Moreover, the concerns also hang over their head about the tapering of stimulus that is yet to be announced this year but no one knows the exact time for it.
What If Scenario
Considering that either of the problem remains or both above mentioned things happen, the stock market would be in serious trouble and it may cause bears to rule the market within a few days as short-selling would also be done by the traders.
Other options for the investors to invest in would be none other than the precious metal – gold – which already has bounced back up yesterday to 1318 level after dropping down to the 1285 region.
Impact on Stocks
The world’s largest seed making company for agricultural production – Monsanto Co. – witnessed a plunge of nearly 1.5% in its stock price on Wednesday, as the bears are driving the Wall Street during this unwanted event.
The aluminum producing company Alcoa Inc. dropped by 1.7% just minutes after the news came that the rating for the company has been degraded by Deutsche Bank AG.
Moreover, Tesla Motors Inc. also lost heavily where its share price dropped by 4.1% that took it down to $the 185 level, since the outlook was cut down to neutral from outperform by Robert Baird & Co. that hinted out some execution risk with which the company is dealing with these days.
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