Stocks fall again; more of the same next week?

A government shutdown and debt default loom as Democrats and Republicans continue to battle over money. The fighting could affect markets next week.

By Charley Blaine Sep 27, 2013 4:33PM
Trading floor © Digital Vision Ltd./SuperStockUpdated: 9:18 p.m. ET

Stocks sagged on Friday and may be offering a preview of what could happen next week -- if federal budget talks collapse and it becomes clear that no one will agree on the terms for raising the nation's debt limit.

The Dow Jones industrials ($INDU) fell more than 116 points before a rebound trimmed the losses by nearly 40%. The Standard & Poor's 500 Index ($INX) fell below 1,695, which had emerged as an important support level.

The market declines meant the Dow and S&P 500 suffered their first weekly loss after three straight gains. Moreover, September's performance, while surprisingly strong, nonetheless has lost some of its luster.

The Dow closed down 70 points to 15,258. The S&P 500 was off 7 points to 1,692, and the Nasdaq Composite Index ($COMPX) had fallen 6 points to 3,782.

The Dow was up as much as 5.9% for the month on Sept. 18, after the Federal Reserve decided not to taper its bond-buying program. The gain has been cut to 3% or by nearly half.

The Dow and S&P 500 have fallen in six of the last seven sessions; the Nasdaq has fallen in four of seven. Lack of progress over the weekend could set up an ugly day on Monday.

The Dow fell 1.25% on the week. The S&P 500 dropped 1.1%. The Nasdaq managed a 0.2% gain for the week, its fourth in a row.

In addition to the trimming of Dow's gains for the month, the S&P 500 is looking at a 3.5% gain, down from 5.7% on Sept. 18. The Nasdaq's winnings have dropped from 5.6% to 5.3% since Sept. 18.

Political warfare was probably the biggest problem for the market on Friday and will be next week, said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors.

But Sozzi also warned the market has been showing signs of stress from a series of disappointing economic reports, including consumer confidence. So there may be downward pressure even if there is some sort of budget deal.

The Senate approved stopgap spending legislation on Friday to keep the federal government open without gutting President Obama’s health care law. The vote sets up a showdown over the weekend, that will decide if much of the government shuts down at midnight Monday.

Republicans offered to keep the government open with a number of conditions that Democrats won't approve: a suspension of Obamacare for a year; approval of the Keystone pipeline from Canada; trimming regulations and tax reform.

If a deal can't be worked out -- and the odds are shrinking -- it is possible that Monday's market could be rocky. A prolonged period where nothing is negotiated could pressure markets in October.

That assessment is based on the history of the 2011 budget accord, that came after Republicans seemed willing to allow a U.S. debt default. Standard & Poor's downgraded U.S. debt. Stocks fell some 10% from the end of July until Sept. 30. The market finally stabilized when the Federal Reserve said it stood ready to assist the economy.

Friday's wrangling offset very strong earnings from Nike (NKE), which became a Dow component this week. Shares were up $3.18 to $73.52 after reaching as high as $75.25. Nike was one of only five five Dow components moving higher on Friday. The others were Microsoft (MSFT), Pfizer (PFE), JPMorgan Chase (JPM) and Merck (MRK). (Microsoft owns and publishes Top Stocks, an MSN Money site.)

In fact, thanks to the Senate vote on Friday, healthcare was the market's strongest sector.

Cerner (CERN) was the top performer among S&P 500 stocks and stocks in the Nasdaq-100 Index ($NDX). Shares were up $3.87 to $52.60 as the developer of information systems for hospitals and health networks announced a multi-year agreement to provide services to Intermountain Healthcare.

Only 83 S&P 500 stocks were higher, along with 31 Nasdaq-100 stocks. The Nasdaq-100 was off 4 points to 3,230.

Crude oil (-CL) in New York fell 16 cents to $102.87 a barrel. For the week, crude was down 1.8% and is down 4.4% for the month. Brent crude was off 58 cents to $108.63. It fell 0.5% for the week and is down 4.7% for the month.

Gold (-GC) climbed $15.10 to $1,339.20 a month. It was up 0.5% for the week but is down 4.1% for September. For the year, gold is still down 20.1%.

With one trading day left in September, Nike is the best performing Dow stock, up 17.2%, followed by Boeing (BA), up 14.3%, and Visa (V), also a newcomer, up 10%. The laggards are Procter & Gamble (PG) and Verizon Communications (VZ), each down slightly less than 1%.

For the quarter, the leaders are United Technologies (UTX), up 17.5%) and Boeing, up 15.9%. The laggards are Verizon and Intel (INTC), down 6.6% and 5.2%, respectively.

Micron Technology (MU), Molex (MOLX) and Regeneron Pharmaceuticals (REGN) are the top S&P 500 performers for the month. Goodyear Tire & Rubber (GT), Netflix (NFLX) and Best Buy (BBY) are the top performers for the quarter.

J.C. Penney (JCP) has been the biggest S&P 500 loser for the month and the quarter.

Sears Holdings (SHLD), Micron and Facebook (FB) have been the best performers among Nasdaq-100 stocks, up more than 40%, 33% and 28%, respectively. Facebook, Baidu (BIDU) and Netflix are the top performers for the last three months.

The week ahead
Next week features some important economic reports. The key report is the jobs report, due before the markets open on Friday.

Also due are:
  • Chicago Purchasing Managers Index, Monday.
  • Institute for Supply Management Index for September, Tuesday.
  • U.S. auto sales, Tuesday.
  • ADP Employment Index, Wednesday.
  • Jobless Claims, Thursday.
Earnings include:
  • Paychex (PAYX), the payroll processor, due after Monday's close.
  • Walgreens (WAG), the drugstore chain, due before Tuesday's open.
  • Monsanto (MON), the seed company, due before Wednesday's open
  • Micron Technology (MU), due after Thursday's close.
More from Top Stocks

Markets for the week



Sept. 27

Sept. 20

% chg.

YTD chg.
Dow Industrials

15,258.24

15,451.09

-1.25%

16.44%
S&P 500

1,691.75

1,709.91

-1.06%

18.62%
Nasdaq 

3,781.59

3,774.73

0.18%

25.24%
Russell 2000

1,074.14

1,072.83

0.12%

26.47%
Crude oil 

$102.87

$104.75

-1.79%

12.03%
(per barrel)











U.S. Dollar Index 

80.38

80.55

-0.21%

0.63%
10-yr. Treasury yield

2.62%

2.73%

-4.14%

49.15%
Gold

$1,339.20

$1,332.50

0.50%

-20.09%
(per troy ounce)











40Comments
Sep 27, 2013 5:37PM
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Shrinking my azz. Its about 5k over what it should be now.. If it wasn't for QE3 and all the others with the Fed using about 83 Billion each month to prop it up then it'd be around 8000-10000. So why the tears? If they want to cut something then drop that 80+Billion each month and let the chips fall where they land. Now theres your National Parks open at full speed. If this country is so close to the brink of defaulting Oct 1 then cut this lining of the richest pockets back. They've gotten enough for the last 5 years.
Sep 27, 2013 4:42PM
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The constant LIES forever swirling around down the finance drain is appalling beyond imagination...

Sep 27, 2013 6:53PM
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Shut it down. They're not doing anything but  further dividing our nation.United we stand Divided we are definitively falling.
Sep 27, 2013 5:51PM
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"Budget battle sinks dow"...lol...down 70 is not sinking, it's a burp.
Sep 27, 2013 7:36PM
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Oh my gosh, the Dow has dropped 70 points.  Oh the humanity!!!   What a crisis!!! Time to call all the banking leaders and get them in a room to hash out another rescue!!! 
Sep 27, 2013 7:38PM
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If they shut down the Gov rush hour during the week  will be like driving on sunday morning let it happen
Sep 28, 2013 11:15PM
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Just an International Law to track weapons, that could be carried by a Foreigner into a different Country..

Most Countries don't allow that now without special permission....

Or maybe exchange of Law Enforcement..?

 

Yes it would be a way to track you on visa or passport as a person that has CCW or owns weapons.

Sep 28, 2013 10:46PM
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And I believe it's only a way to track weapons that "could possibly" come in or out of Country.

Some/many places guns are traded like baseball cards or bought like hammers and screwdrivers.

And we know the same people everywhere "won't comply" anyway.

 

No additional paperwork...Just allow tracking of your weapons by any other Country.

You only have to register once and it would be duplicated to others.

Classic think you are getting haired up over nothing...

OR YOU ARE LISTENING TO, TOO MUCH TALK RADIO.

or Conspirator Theorist.?

Sep 28, 2013 10:39PM
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NO U.N. agreement............WILL EVER replace OUR CONSTITUTION...

 

NOT on our SOVEREIGN LAND...........NEVER.

Sep 27, 2013 4:53PM
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Is this just another excuse to tank the  market, And take profit?                                                                      Has the helicopter run out of fuel?  

Republicans offered to keep the government open with a number of conditions that Democrats won't approve: a suspension of Obamacare for a year; approval of the Keystone pipeline from Canada; trimming regulations and tax reform. 
Obviously  there is no negotiating with Democrats, it's their way or the highway.
 In my opinion I would implement Obama Care as soon as possible. Let the weight of Democrat decision come down on the American people. 2014 midterm elections will determine whose side Main Street is on.
This will probably damage the economy further, LET THE CHIPS FALL WHERE THEY MAY !!!!!

Sep 27, 2013 7:45PM
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The "catalyst" that will bring on the correction is-- the impasse itself. People are falling apart across America. Patience is ruining thin. We have no use for business platforms that operate adverse to the economy and society. I wouldn't tolerate another Band-Aid on the budget and there is no need for a debt ceiling increase if the funds don't fix anything. At this point, we would be best off to flush every degree out of every business and block it from future wage-earner employment. If you have "talent"... go make an enterprise that pays your worth. Time to end Facebook, Twitter and Linked-In, replacing them with fully visible communication with validation. Kiss the cliques good-bye and progress.
Sep 28, 2013 8:09PM
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You have no idea who I am or what my beliefs are !!
1- Pro life - YES I AM,, for Myself,as a libertarian. I believe that people have the right to do whatever they choose with their body,just don't try to hand me the TAB !
2-Anti- Gay - no ,,,,just homophobic,but I deal with it,again you can do what ever floats your boat. I have specific advertising that attracts GAY MARRIAGES,,
3- I am a LIFE MEMBER OF THE N R A .    Are you aware of the U N small arms treaty ?   If they could get it through the HOUSE you could almost kiss the 2nd AMENDMENT GOODBYE !
4- I have never seen such a corrupt use of government resources ON BOTH SIDES, than in the GREEN INITIATIVE.
More taxpayer $$$ wasted to develop a technology that is in sight but out of reach at this time, in 100 hundred years we went from a MODEL A  TO A hybrid vehicle  that gets  60 M P G, let the free market develop the technology and keep the LOBBYIST out of it !  WAS THAT NOT AN OBAMA PROMISE ""THERE WILL BE NO LOBBYIST IN MY ADMINISTRATION""?
5-Limited resources in THE MARKET,,With stop sells on everything. As the Stock increases the stop sell increases with it.  I WON'T GET CAUGHT  SHORT. And I am diversified,I just wish i could find some MUNI'S i could trust.
6-THE A C A,,  C B O reports the expected cost shall double from 800 BILLION to 1.6 trillion,,,can someone  speak the TRUTH PLEASE
7-You want to bring down healthcare costs,, TORT REFORM AND Portability!!!  80 % of congress are attorneys that support their brethren. ENOUGH !!!
8-The house REPUBLICANS ARE THE LEAST GREATEST OF 2 EVILS,, IMO,,
9-THERE ARE ONLY 3 PEOPLE I TRUST,,,  1- JESUS CHRIST, 2-MY MOTHER, 3- MY HUSBAND
I DO NOT TRUST ""ANY"" POLITICIAN  ON EITHER SIDE ,,AND THAT IS THE TRUTH

IN  MY PREVIOUS POSTS YOU MAY HAVE SEEN ""IT'S ALL ABOUT POWER AND CONTROL""
AND I STAND BY THOSE WORDS TODAY !!! 

Sep 27, 2013 6:07PM
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Here we go again with these talking heads coming up with some obscure reason for the market going down. It's down because Wall Street / the rich are stripping monies out of your 401K's that you can't take out all at one time.

 

There is no new monies to steal from other than 401K money so they manipulate the market and take their f------ profits at our expense.

Sep 28, 2013 11:03PM
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TOG 
IT WAS REPORTED ON N B C NIGHTLY LOCAL NEWS 
WHY DOES THE UN NEED TO KNOW WHO THE OWNERS OF SMALL ARMS IN OUR COUNTRY ARE ?
 IMPORTER, DISTRIBUTOR, AND END USER
WE ALREADY USE ATF 4473 AS A DATABASE
                                                                                           

NO CONSPIRACY,,,,,JUST FACT 
Sep 28, 2013 9:54PM
avatar
ACTIVE 

AND SPEAKING OF THE SECOND AMENDMENT,,, THE OBAMA ADMINISTRATION AND                   SECT. KERRY HAVE JUST SIGNED AN  AGREEMENT AT THE U.N. THAT REQUIRE REGISTRATION OF SMALL ARMS  AS MANDATORY UNDER INTERNATIONAL LAW. WE ALREADY HAVE A T F  FORM 4473,,WHY REQUIRE THE ADDITIONAL PAPERWORK ??
 I THOUGHT WE WERE A SOVEREIGN COUNTRY !!!!!!!!      HHHMMMMMMMMMMM ??????
Sep 27, 2013 9:17PM
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Just not worth the trouble......Fray away...
Sep 27, 2013 4:53PM
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Tea party is going to ruin this country
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