US stocks fall as political impasse drags on
Stocks on the American exchange fell for a second straight day as lawmakers remained deadlocked over the budget ceiling. The partial government shutdown is well into its second week, as party-line politics continue to dominate the debate.
Democrats and Republicans pointed the finger at one another, with each side saying the other party must act first to resolve the budget crisis. House Speaker and Ohio Republican John Boehner insists President Barrack Obama should negotiate conditions to end the first government shutdown in 17 years, whereas Senate Majority Leader and Nevada Democrat Harry Reid said the House should vote to end the stalemate without changing the 2010 Affordable Care Act.
The political impasse could potentially lead to devastating consequences if lawmakers fail to reach a resolution before the October 17 deadline, when the US government loses its borrowing authority. Democrats are demanding the House of Representatives vote to authorize an increase to the debt ceiling before the deadline.
The Standard & Poor’s 500 registered its biggest two-day decline since August, falling more than 1.2 percent to 1,655.45. The benchmark index fell 0.85 percent the previous day. The Dow Jones Industrial Average registered its second triple-digit loss in as many days, dropping more than 159 points to 14,776.50. All but three of the Dow’s members declined, with Verizon Communications(NYSE:VM) and AT&T (NYSE:T) incurring the steepest losses at 2.62 percent.
The NASDAQ Composite slumped 2 percent after Facebook and Yahoo! declined at least 3.5 percent. Tech giants Microsoft(NASDAQ:MSFT) and Apple (NASDAQ:AAPL) fell at least 0.8 percent, rounding out a woeful day for the technology sector.
With no end to the political impasse in sight, market participants are losing patience. Unable to determine the current economic situation due to several data delays emanating from the government shutdown, investors have lost confidence in their ability to predict what happens next. The Chicago Board Options Exchange Volatility Index, the VIX, jumped more than 4.7 percent to 20.34 after surging 16 percent the previous day.
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