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US stocks extend losses as government shutdown continues

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US stocks extend losses as government shutdown continues

Stocks on the American exchange decline for the third time this week, as investors weigh the ongoing political gridlock in Washington against disappointing US service data from the Institute of Supply Management.

The partial government shutdown entered its third day, as both sides of the stalemate blamed one another for the stoppage. President Barrack Obama said the only way out of the political gridlock was for House Speaker John Boehner to allow a vote on stopgap spending measures without any conditions.

Meanwhile, the American service economy expanded at a slower rate than the previous month, according to a monthly report from ISM. The September PMI reading of 54.4 represents a significant drop over the previous month, as overall business conditions slowed at the end of the third quarter. Weak services growth has fueled concerns the government shutdown could result in a recession in the fourth quarter.

The Standard & Poor’s 500 fell 0.9 percent to 1,678.66, the lowest in more than three weeks. All ten major industries on the S&P 500 declined. The Dow Jones Industrial Average was down more than 136 points to 14,996.50, with all but one of its 30 members declining. Among the Dow’s biggest losers were Boeing Company and Chevron Corporation, which declined at least 2.1 percent. The NASDAQ Composite also fell more than 1 percent to 3,774.34.

Market participants looking to determine the Federal Reserve’s next course of action will be required to do so without official employment data. As the political impasse continues, the Labor Department will not be releasing monthly nonfarm payroll data, which were scheduled for Friday. The Labor Department did however issue a statement earlier in the week it would continue to produce weekly jobless claims. According to Thursday’s report, 308,000 Americans filed for unemployment benefits last week, bringing the four-week moving average to 305,000.

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