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U.S. futures slide lower on budget worries; Dow Jones down 0.85%

Published 09/30/2013, 06:48 AM
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Investing.com - U.S. stock futures pointed to a lower open on Monday, as mounting concerns over a possible government shutdown in the U.S. weighed broadly on market sentiment.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.85% loss, S&P 500 futures signaled a 0.86% drop, while the Nasdaq 100 futures indicated a 0.78% decline.

Markets were jittery as political wrangling in Washington over funding for President Barack Obama’s healthcare law continued over the weekend, fuelling fears over the prospect for a government shutdown.

Congress must pass a short-term budget by midnight on Monday in order to keep the government open.

Republican opposition to the funding of the Affordable Care Act has created a standoff with the White House and the Democratic-controlled Senate, which have both said they will not support any budget bill that defunds or amends Obamacare.

Tech stocks were expected to be active, after BlackBerry on Friday posted a quarterly loss of nearly USD1 billion, as previously warned, which included a writedown for unsold Z10 smartphones, the company's latest device.

Last week, BlackBerry signed a tentative USD9-a-share agreement to be acquired by a consortium led by Fairfax Financial, its largest shareholder.

Retailers were also likely to remain in focus, after J.C. Penney last week priced 84 million shares of common stock at USD9.65 each through Goldman Sachs. The company's shares were down 1.44% in pre-market trade, after diving nearly 15% on Friday.

Nike slipped 0.29% in early trading after surging over 4% on Friday, boosted by higher than expected quarterly results thanks to strong sales in North America and Europe. In addition, at least seven brokerages upped their price targets on the sports apparel retailer.

Other stocks likely to remain in focus included Lumber Liquidators, following reports federal authorities executed a search warrant at the hardwood flooring retailer's headquarters.

Across the Atlantic, European stock markets were lower. The EURO STOXX 50 retreated 0.89%, France’s CAC 40 tumbled 1.07%, Germany's DAX declined 0.83%, while Britain's FTSE 100 shed 0.71%.

During the Asian trading session, Hong Kong's Hang Seng Index tumbled 1.50%, while Japan’s Nikkei 225 Index plunged 2.06%.

Investors also remained cautious after Silvio Berlusconi announced Saturday that he was pulling his ministers out of Prime Minister Enrico Letta’s coalition government and called for fresh elections to be held.


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