U.S. stock-index futures sank, pointing out to lower opening of the Standard & Poor’s 500 Index which may extend two weeks of losses, as negotiations to lift up the nation’s debt limit and avoid a default made little progress.
S&P 500 futures expiring in December fell 0.8% to 1,671 at 8:56 a.m. in New York after the benchmark index had its first back-to-back weekly retreat since August. Future contracts on the Dow Jones Industrial Average lost 116 points, or 0.8 percent, to 14,882 today.
“This is a good reason for traders to put some volatility back into the market,” said for Bloomberg Robert Royle, who helps oversee $21 billion as manager of the North American Trust at Smith & Williamson Investment Management LLP in London. “We have a vacuum as there is no economic data and the earnings season hasnt started yet. A default is a much a bigger issue, but they will likely have to come to an agreement.”
Chris Hobart, chief executive of financial advisory firm Hobart Financial, which manages around $300 million, said for The Wall Street Journal that the disagreement in Congress is starting to affect the confidence of Main Street investors. “We are hearing a lot more people calling in nervous and asking questions about what they should do,” Mr. Hobart said. “The fear is starting to build up.”
In corporate news, Alcoa retreated in pre-market trade. The aluminium company will unofficially start third quarter earnings reporting season as it will reveal results after Tuesdays close.
Dow component Boeing slid after Airbus won a order worth more than $9 billion from Japan Airlines, which had previously exclusively ordered jetliners from the aircraft maker and being one of Boeings most loyal customers.
IBM, the world’s largest computer-services provider, slipped 1.3% to $181.63 in early New York trading. Barclays downgraded its recommendation on the shares to “hold”, from “buy”. The brokerage cited concern that IBM’s cash flow may be affected as customers move to online-based software. IBM shares have fallen 3.9% this year.