New York Report: Washington impasse drags Wall St down

WALL Street retreated yesterday, the second day of a partial US government shutdown, as political wrangling in Washington raised investor concerns that the stoppage could be prolonged.

Adding to worries, a report showed private employers added fewer-than-expected jobs in September. Investors were looking for more guidance from this data because Friday’s broader, government payrolls report will be delayed if no deal on the budget is reached by then.

Losses were across the board, led by stocks in the industrial sector, which fell 0.4 per cent.

The shutdown fight is rapidly merging with a higher-stakes battle over the government’s borrowing power that is expected to come to a head soon. The Treasury has said the United States will exhaust its borrowing authority no later than 17 October. “I wouldn’t call the market’s decline today a panic. But the longer this (shutdown) goes on, and the more headlines shift towards the 17 October deadline, investors are becoming more and more concerned,” said Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial.

“As impossible as it seems, investors are thinking that there might now be a possibility of a default.”

The Dow Jones industrial average was down 58.56 points, or 0.39 per cent, at 15,133.14. The Standard & Poor’s 500 Index was down 1.13 points, or 0.07 per cent, at 1,693.87. The Nasdaq Composite Index was down 2.96 points, or 0.08 per cent, at 3,815.02.