Stock Futures Slump Amid Budget Impasse
NEW YORK ( TheStreet) -- Stock futures were pointing to a weaker open on Wall Street Monday as investors remained concerned the government was poised for a shutdown by midnight as the budget negotiations in Washington appear to have hit at an impasse.
The Republican-controlled House of Representatives voted over the weekend for federal funding measures tied to a one-year delay to the Patient Protection and Affordable Care Act and the repealing of a medical device tax. The Democrat-led Senate is expected to convene at about 2 p.m. Monday, during which the House proposals are anticipated to be rejected.
Futures for the S&P 500 were trading lower by 15.5 points, or 13.75 points below fair value, to 1,671. Futures for the Dow Jones Industrial Average were sinking by 142 points, or 125.24 points below fair value, to 15,053. Futures for the Nasdaq were declining by 29.75 points, or 28.40 points below fair value, to 3,193.25.
"The animosity between the two parties runs deep and there is no obvious middle ground to which both could easily move," Brian Hillard, a London-based economist at Société Générale, wrote in note. "A government shutdown could interrupt the flow of economic data. At such a critical time when the Fed has made clear that any decision on tapering will be data dependent, that means no data, no decision."A weaker-than-expected increase in a Chinese manufacturing gauge from HSBC and Markit Economics also worried investors heading into what's expected to be a week of light global trading volumes as China begins its Golden Week holiday. Achillion Pharmaceuticals ( ACHN) was plummeting 53% to $3.45 after the company said the U. S. Food and Drug Administration won't remove the clinical hold on its drug sovaprevir. eBay ( EBAY) was shedding 0.93% to $55.26 after failing to get a removal of the U.S. antitrust lawsuit triggered by its hiring agreements with Intuit ( INTU ). Colgate-Palmolive (CL) was also garnering investor attention after Morgan Stanley boosted its view on the consumer staples stock to "overweight" from "equal weight," predicting sales growth that will exceed its competitors.' Panera Bread (PNRA) was slipping 2.04% to $160.69 after the franchise-operated bakery-café stock was cut to "equal weight" from "overweight" by Morgan Stanley analysts who were concerned about its same-store sales growth momentum. The U.S. economic calendar on Monday includes the September Chicago Purchasing Managers Index expected at 9:45 a.m. EDT. An increase to 54 from 53 the prior month is expected. Follow @atwtse -- Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.>
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