US futures down sharply as budget impasse drags on

AP News
Posted: Oct 02, 2013 9:03 AM
US futures down sharply as budget impasse drags on

NEW YORK (AP) — Stock futures fell significantly Wednesday with both sides in the budget battle appearing to grow more entrenched and prepared to slug it out.

Because of the partial government shutdown the ADP private payroll report, usually a precursor to crucial U.S. monthly jobs data, became the most crucial indicator this week.

While private employers added 166,000 jobs, the ADP report was not as strong as economists had expected.

Dow Jones industrial futures fell 77 points to 15,043. S&P futures lost 10 points to 1,679.40. Nasdaq futures slid 17.5 points to 3,228.

Because of the vacuum created by the shutdown of the Labor Department, which will not release the September jobs statistics as scheduled this week if there is no resolution in Washington, the ADP report took on greater weight.

Economists had been looking for job additions in the neighborhood of 180,000, much stronger than the actual number released Wednesday. Employers added just 159,000 jobs in August and 161,000 in July, according to ADP, but both of those figures were slightly lower than the original projections as well.

Markets shook off the partial government shutdown Tuesday, but that sentiment appeared to change Wednesday with no resolution in sight.

The costs of the shutdown, given the fledgling recovery, may be starting to sink in.

Economists say that every week the government is shuttered trims about 0.2 percent from gross domestic product.

That could grow worse if turmoil on the Capitol begins to depress consumer or business confidence.