New York Report: Debt talks still ongoing as US results go out

US STOCK investors, hoping to leave politics aside to focus on fundamentals, aren’t going to get their wish yet as talks over raising the debt ceiling and reopening the government broke down over the weekend.

The S&P 500 generated two days of strong gains in advance of the weekend on hopes an agreement to raise the $16.7 trillion federal borrowing limit was near.

But the snag was expected to cause selling pressure to resume as investors now believe the negotiations will come down to a 17 October deadline to increase the debt ceiling.

This week is a busy one for corporate earnings. Among the early indications, Wells Fargo said revenue from home refinancings fell to its lowest level since the second quarter of 2011. The first busy week of third-quarter results is led by bellwethers General Electric, Goldman Sachs, and Google.

S&P 500 companies are expected to post earnings growth of 4.2 per cent in the quarter, down from the 8.5 per cent rate that had been forecast on 1 July, according to Thomson Reuters data. Of the 31 S&P components that have reported thus far, about 55 per cent have topped expectations, below the historical average of 63 per cent.

While some government-prepared economic data will be delayed next week because of the shutdown, including consumer prices and housing starts, those still scheduled include the New York Fed manufacturing survey and Philadelphia Fed survey, both for October.

Today is Columbus Day and a federal holiday but markets are open.