Johnson Controls (JCI - Get Report) shares dropped 2.4% to $41.50 as the U.S. auto-parts maker was cut to "underweight" from "overweight" by analysts at Morgan Stanley, with the price target reduced to $40 from $45. "With execution back on track, a new CEO lobbying for change and the stock at $43, expectations into the analyst day may be too high," they wrote.
J.C. Penney (JCP - Get Report) shares slumped 2.7% to $8.81 as uncertainty about the direction of the company continued to concern investors. Chipotle Mexican Grill (CMG - Get Report) popped 2.3% to $428.80. Morgan Stanley analysts have raised their view on the stock to "overweight" from "equalweight" with a $485 price target after their consumer survey indicated the restaurant chain has best in class value scores, a strong indicator of future traffic gains. A government shutdown may provide investors an enticing entry point, said Craig Johnson, a senior technical research strategist at Piper Jaffray. Johnson referenced S&P Capital IQ, which reports that the peak-to-trough decline of the S&P 500 associated with the shutdown of the U.S. government between Dec. 16, 1995 and January 6, 1996 was 3.7%. However, once a budget agreement was reached, the S&P 500 jumped 10.5% over the following month.
<story_page_break> Jeffrey Saut, a Florida-based chief investment strategist at Raymond James, predicts that after the markets gets past these humps, equities may mirror their performance following the "fiscal cliff" debate at the beginning of the year: the S&P 500 index rallied 100 points. "The Republicans are no longer trying to extract major spending reductions in exchange for their budgetary votes," Saut said in a note. "Republicans are now using budget votes to advance a political cause, the abolition of Obamacare, which is purely symbolic because it offers no scope of compromise with the President and therefore no chance of enactment...this charade will be resolved over the next few weeks.'" 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. The tense political climate in Italy wasn't helping either after the government of the eurozone's third largest economy appeared to be close to collapsing after allies of center-right leader Silvio Berlusconi threatened to resign from the cabinet. The September Chicago Purchasing Managers Index on Monday showed an increase to 55.7 from 53 versus the consensus estimate of 54. -- Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.>