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US stock-index futures retreat amid third day of shutdown

Stock-Market-NewsU.S. stock-index futures slipped, hinting the Standard & Poor’s 500 Index will drop for a second day, as budget talks between President Barack Obama and congressional leaders struggled to reach progress.

S&P 500 futures expiring in December lost 0.3% to 1,678.5 at 12:30 p.m. in London after the benchmark gauge slipped 0.1% yesterday. The index has still advanced 0.7% since the close on Sept. 30 after Congress’s failure to pass a budget led to the the first federal shutdown in 17 years. Contracts on the Dow Jones Industrial Average dropped 35 points, or 0.2%, to 14,990 today.

The losses followed worries over the shutdown of the U.S. government and the impact it could have on the debate over the debt ceiling. A meeting between President Barack Obama and congressional leaders ended Wednesday night with no decision taken to reopen the U.S. government and House Speaker John Boehner told reporters that Obama repeated he wouldnt negotiate about passing a funding bill.

“The market seems to have taken the shutdown in its stride so far, but there will be a cost to GDP growth at some point if it continues,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich. “The real test will be the debt ceiling. Here the government really cannot afford to not increase it in due time.”

In corporate news, United Technologies dropped 0.3% to $104.69. The first effect of the shutdown will be layoffs for about 2,000 Sikorsky Aircraft employees in Connecticut, Florida and Alabama on Oct. 7, United Technologies said yesterday. They may be followed by 2,000 furloughs at Pratt & Whitney and UTC Aerospace Systems if the shutdown lasts into next week.

Shares of Tesla Motors Inc. came under pressure in premarket, down 2.5% after skidding by their worst percentage drop since July on Wednesday, after a YouTube video showed a burning Model S and an analyst downgraded the stock.

Zale Corp. could also show some moves, after the jewelry retailer late Wednesday disclosed that it is registering 11.1 million shares issuable in the event that warrants previously issued by the company are exercised.

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