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TheStreet Open House

Morning Briefing: 10 Things You Should Know

NEW YORK ( TheStreet) -- Here are 10 things you should know for Wednesday, Oct. 2:

1. -- U.S. stock futures were pointing to losses on Wall Street on Wednesday as the U.S. government shutdown enters a second day.

European stocks were trading to the downside early Wednesday. Asian shares finished the session mostly higher, but Japan's Nikkei 225 index declined 2.2% after the government announced it would go ahead with a sales tax increase in April.

2. -- The economic calendar in the U.S. Wednesday includes the ADP Employment Change index for September at 8:15 a.m. EDT.

3. -- U.S. stocks on Tuesday rose as investors embraced signs of growth in manufacturing while betting that House Republicans will eventually cut a deal with the Democrat-led Senate to end the government's partial shutdown.

The S&P 500 gained 0.8% to close at 1,695.00 while the Dow Jones Industrial Average added 0.4% to finish at 15,191.70. The Nasdaq ended the trading day up 1.2% to 3,817.98.

4. -- The partial U.S. government shutdown shows no signs of ending Wednesday, leaving national parks, the Veterans Affairs Department and city services in Washington, D.C., essentially closed.

Lawmakers in both the Republican and Democrat parties suggested the partial shutdown might last for weeks.

A funding cutoff for much of the government began Tuesday as a GOP effort to kill or delay the nation's health care law stalled action on a short-term, traditionally routine spending bill.

Even as many government agencies closed their doors, health insurance exchanges that are at the core of President Barack Obama's health care law were up and running, taking applications for coverage that would start Jan. 1.

"Shutting down our government doesn't accomplish their stated goal," Obama said of his Republican opponents at a Rose Garden event hailing implementation of the law. "The Affordable Care Act is a law that passed the House; it passed the Senate. The Supreme Court ruled it constitutional. It was a central issue in last year's election. It is settled, and it is here to stay. And because of its funding sources, it's not impacted by a government shutdown."

5. -- Three of the top 20 investors in Microsoft (MSFT - Get Report) are lobbying the software company's board to press for Bill Gates to step down as chairman, Reuters reported, citing people familiar with matter.

Gates co-founded Microsoft 38 years ago.

The move appears to be the first time that major shareholders are taking aim at Gates, Reuters noted, for the company's performance and share price. The three investors are concerned that Gates' role as chairman blocks the adoption of new strategies and would limit the power of a new CEO to make substantial changes. CEO Steve Ballmer said in August he would retire within 12 months.

A Microsoft representative declined to comment for Reuters on Tuesday.

There is no indication that Microsoft's board would heed the wishes of the three investors, who collectively hold more than 5% of the company's stock, according to the sources, Reuters reported. Gates owns about 4.5% of the company and is its largest individual shareholder.

6. -- New York Attorney General Eric T. Schneiderman is preparing a lawsuit against Wells Fargo (WFC - Get Report), accusing the bank, the nation's largest home lender, of violating the terms of a multibillion-dollar settlement aimed at stanching foreclosure abuses, The New York Times reported.

The lawsuit, which is expected to be filed as early as Wednesday, accuses Wells Fargo of violating the guidelines of a broad agreement reached last year between five of the nation's largest banks and 49 state attorneys general, the Times reported.

Under that deal, the banks must comply with 304 servicing standards. The guidelines map out how banks should field and process requests from distressed homeowners, the Times noted.

A spokeswoman for Wells Fargo told the Times the bank hadn't been served with a copy of the lawsuit. But, she added, "if true, it is very disappointing that the New York attorney general continues to pursue his course, given our commitment to the terms of the National Mortgage Settlement and ongoing engagement."

7. -- Bank of America (BAC - Get Report), however, won't be sued by Schneiderman, who said he's dropping a similar action against Bank of America because the bank agreed to reforms of its lending system.

"We're pleased with the significant assistance Bank of America has extended, and continues to extend, to homeowners through the National Mortgage Settlement, and we will continue working with attorneys general nationwide to continually improve the experience for customers eligible for these important programs," Bank of America spokesman Dan Frahm said.

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