REFILE-US STOCKS-Wall St falls as shutdown continues, jobs data weighs

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Reuters NEW YORK
Last Updated : Oct 03 2013 | 12:20 AM IST

By Julia Edwards

NEW YORK (Reuters) - U.S. stocks fell on Wednesday, the second day of a partial U.S. government shutdown, as congressional leaders and President Barack Obama planned to meet in the White House to discuss the budget impasse and raising the U.S. debt limit.

All ten S&P 500 sectors were lower, with consumer staples stocks <.SPLRCS> the weakest, off 0.73 percent. Dow component Coca-Cola was one of the sector's worst performers, falling 1.3 percent to $37.47.

The federal government, except for essential services, came to a halt on Tuesday after the Senate blocked a Republican-backed House bill that would have funded the government but only if Obamacare were delayed, an action Obama has dismissed.

Republican House Speaker John Boehner's office said the meeting, scheduled for 5:30 p.m. (2130 GMT) Wednesday, would be the start of serious talks to bridge differences that led to government agencies shutting down.

Despite a market bounce-back on Tuesday, the political wrangling in Washington has raised investor concerns that the shutdown could be prolonged and sap Americans' confidence as well as hurt economic growth.

"We're looking at a position where people don't necessarily want to have risk on right now," said Joseph Greco, managing director at Meridian Equity Partners in New York.

Payrolls processor ADP said U.S. private employers added 166,000 jobs in September, below expectations for 180,000 jobs. Investors were looking to this report for more guidance because Friday's broader, government payrolls report will be delayed if no deal on the budget is reached by then.

The Dow Jones industrial average was down 67.49 points, or 0.44 percent, at 15,124.21. The Standard & Poor's 500 Index was down 2.81 points, or 0.17 percent, at 1,692.19. The Nasdaq Composite Index was down 0.58 points, or 0.02 percent, at 3,817.40.

Monsanto Co reported a fourth-quarter loss that was wider than expected, and offered a lower outlook for 2014 even as it said it was positioned for strong growth next year. Shares fell 2.7 percent to $102.21.

BlackBerry Ltd fell to an 11-month low after a report that the smartphone manufacturer expects to take $400 million in pre-tax charges related to cost-cutting, multiplying its previous estimate by 4. BlackBerry shares were down 4 percent to $7.85.

Despite the recent declines, buyers have come in as the S&P approached its 50-day moving average of 1,679.78. The moving average represents a measure of the near-term trend in the market and often investors will buy in clusters at such levels.

The shutdown's impact on economic growth and market volatility will likely increase the longer it continues.

The CBOE Volatility index <.VIX> gaining more than 25 percent over the past two weeks. On Wednesday the VIX was up 5 percent to 16.25, still considered a low level.

(Editing by Bernadette Baum and Kenneth Barry)

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First Published: Oct 03 2013 | 12:04 AM IST

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