News / Economy

U.S. Debt Doubts Keep Lid on Shares

Trader Gregory Rowe, left, and specialist Anthony Rinaldi work on the floor of the New York Stock Exchange, Oct. 7, 2013.Trader Gregory Rowe, left, and specialist Anthony Rinaldi work on the floor of the New York Stock Exchange, Oct. 7, 2013.
x
Trader Gregory Rowe, left, and specialist Anthony Rinaldi work on the floor of the New York Stock Exchange, Oct. 7, 2013.
Trader Gregory Rowe, left, and specialist Anthony Rinaldi work on the floor of the New York Stock Exchange, Oct. 7, 2013.
Reuters
The lack of an expected deal over the weekend to avert a looming U.S. debt default kept world equity markets and the dollar under pressure on Monday, while the yen rose as some investors shifted into safer assets.

Senate Majority Leader Harry Reid and Republican leader Mitch McConnell held talks that Reid on Sunday called ``substantive.'' Reid did not provide details.  Though Reid's remarks gave some hope that Congress soon might pass legislation to fund the government and raise its borrowing authority, investors took a less optimistic view.

``Everybody went home last Friday figuring we had a deal in our hand,'' said Brad McMillan, chief investment officer at Commonwealth Financial in Waltham, Massachusetts. ``But then you go through the weekend and the news was pretty much bad.''

Even if a deal gets done, which McMillan said was likely, the stand-off had created ``justifiable anxiety'' and tremendous  uncertainty, he said. ``We've done more damage both directly to the economy, through the shutdown, and indirectly through postponing decisions and reintroducing uncertainly in the decision processes than anyone appreciates,'' McMillan said.  

MSCI's world equity index fell 0.2 percent, while the FTSE Eurofirst 300 index of leading European shares was little changed, up about 0.04 percent. On Wall Street, the Dow Jones industrial average was down 72.63 points, or 0.48 percent, at 15,164.48. The Standard & Poor's 500 Index was down 8.57 points, or 0.50 percent, at 1,694.63. The Nasdaq Composite Index was down 15.30 points, or 0.40 percent, at 3,776.58.  

The cautious mood was reflected in the market's neutral reaction to news that factory output in the euro zone grew at its strongest pace in two years in August.  ``It's not time to be adventurous right now,'' said Alastair Winter, chief economist at Daniel Stewart. ``I don't think people should be in a rush to do anything.'' The dollar, as it has since the budgetary crisis, bore the brunt of the nervousness, shedding 0.47 percent against the safer option of the yen to trade at around 98.10 yen.

The dollar also slipped 0.55 percent against the Swiss franc  at 0.9072 francs, while the euro rose 0.32 percent to $1.3584.    

Adding to market worries, China said exports dropped 0.3 percent in September from a year earlier against expectations of a 6 percent rise, while annual inflation rate hit a 7-month high of 3.1 percent, limiting scope for rate cuts.  

The decline in exports from the world's second-largest economy has raised questions over the global recovery, which were highlighted by the IMF last week when it trimmed its forecast to the lowest since the global recession in 2009.  

Brent crude dropped almost to $110 a barrel, while copper edged up 0.78 percent to $7,256.25 a ton as strong imports of the metal from top consumer China boosted optimism about the outlook for demand. Brent crude futures fell by $1.14 to $110.14. U.S. oil pared early gains and was down 46 cents at $101.56. U.S. government debt markets were closed because of Columbus Day, a federal holiday.

You May Like

Sunni-Shi’ite Divide Threatens Stability of Middle East

Ancient dispute that traces back to the Islamic Revolution fueling modern day unrest More

Shifting Demographics Lie Beneath Racial Tensions in Ferguson

As Missouri suburb morphed from majority white to majority black, observer say power structure remained static More

Video Artists Shun Russia's Profanity Law

Restriction is toughest since Soviet era, though critics reject move as patronizing and ineffective act of censorship in line with a string of conservative morality laws More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Native Bees May Help Save Cropsi
X
Deborah Block
August 22, 2014 12:23 AM
U.S. President Barack Obama has called for a federal strategy to promote the health of bees that have been declining. The honeybee has been waning due to parasites, disease and pesticides. Wild bees may be used to take over their role as crop pollinators. Scientists first need to learn a lot more about wild bees, says biologist Sam Droege, who is pioneering the first national inventory on native bees. VOA’s Deborah Block went to his research laboratory in Beltsville, Maryland, to bring you more.
Video

Video Native Bees May Help Save Crops

U.S. President Barack Obama has called for a federal strategy to promote the health of bees that have been declining. The honeybee has been waning due to parasites, disease and pesticides. Wild bees may be used to take over their role as crop pollinators. Scientists first need to learn a lot more about wild bees, says biologist Sam Droege, who is pioneering the first national inventory on native bees. VOA’s Deborah Block went to his research laboratory in Beltsville, Maryland, to bring you more.
Video

Video US Defense Officials Plan for Long-Term Strategy to Contain Islamic State

U.S. defense officials say American air strikes in Iraq have helped deter Islamic State militants for the time being, but that a broad international effort is needed to defeat the extremists permanently. Defense Secretary Chuck Hagel warned Thursday that the group formerly known as the Islamic State in Iraq and the Levant, or ISIL, is better organized, and financially and militarily stronger than any other known terrorist group. Zlatica Hoke has more.
Video

Video Drug-Resistant Malaria Spreads in Southeast Asia

On Thailand’s border with Myanmar, also known as Burma, a malaria research and treatment clinic is stepping up efforts to eliminate a drug-resistant form of the parasite - before it spreads abroad. Steve Sandford reports from Mae Sot, Thailand.
Video

Video Gaza Conflict, Hamas Popularity Challenge Abbas

The Palestinian unity government of Mahmoud Abbas has failed to convince Hamas to agree to Egyptian-negotiated terms with Israel on a Gaza cease-fire. VOA State Department Correspondent Scott Stearns reports on what the Gaza conflict means for President Abbas, with whom U.S. officials have worked for years on a two-state solution to the Israeli-Palestinian conflict.
Video

Video Nigeria's 'Nollywood' Movie Industry Rolls in High Gear

Twenty years after its birth in a video shop in Lagos, Nigeria's "Nollywood" is one of the most prolific film industries on earth. Despite low budgets and whirlwind production schedules, Nigerian films are wildly popular in Africa and industry professionals say they hope, in the future, their films will be as great in quality as they are in quantity. Heather Murdock has more for VOA from Lagos.
Video

Video UN Launches 'Biggest Aid Operation in 30 Years' in Iraq

The United Nations has launched what it describes as one of the biggest aid operations in 30 years in northern Iraq, as hundreds of thousands of refugees flee the extremist Sunni militant group calling itself the Islamic State. As Kurdish and Iraqi forces battle the Sunni insurgents, the fighting has forced more people to flee their homes. Kurdish authorities say the international community must act now to avert a humanitarian catastrophe. Henry Ridgwell reports for VOA from London.
Video

Video Cambodian American Hip Hop Artist Sings of Personal Struggles

A growing underground movement of Cambodian American hip hop artists is rapping about the struggles of living in urban America. Most, if not all of them, are refugees or children of refugees who came to the United States from Cambodia to escape the Khmer Rouge genocide of the 1970s. Through their music, the artists hope to give voice to immigrants who have been struggling quietly for years. Elizabeth Lee reports from Long Beach, California.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.