Dow Futures Slide As Boehner Rules Out Clean Debt Deal

LONDON — Stock index futures at 7am ET indicated the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.86% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open 0.95% lower, as investors prepare for a week of tortuous political negotiations over the US debt ceiling, following Speaker John Boehner’s statement that he will be unable to pass a deal to raise the debt ceiling without some kind of concessions from the Obama administration, something President Obama has previously ruled out.

CNN’s Fear & Greed Index remains in the fear zone, and is expected to open at 35 this morning, after closing at 28 on Friday.

European markets dipped this morning, as uncertainty over US debt ceiling negotiations continued to dominate sentiment.

In Europe, EADS, which manufacturers Airbus airliners, was up by 1.8% on news that it is expected to receive a substantial order from Japan Airlines, one of the last remaining Boeing-dominated operators.

London-listed luxury goods manufacturer Burberry Group dipped after the firm’s CEO said that the current dip in Chinese sales may persist longer than expected. At 7am ET, the FTSE 100 was down 0.90%, the DAX was down 1.12%, and the CAC 40 was down 1.00%.

US investors will eye today’s August consumer credit report for signs of a strengthening recovery, but the report, which is due at 3pm ET, is likely to be overshadowed by debt ceiling negotiations, as the 17 October deadline — after which the US may default on its debts — approaches fast.

Today also sees the start of earnings season.

Traditional bellwether Alcoa does not report until tomorrow, but despite being demoted from the Dow Jones last month, the aluminium manufacturer is still likely to be seen as a key indicator of global economic activity. Among a handful of companies due to report earnings today is homebuilder and mortgage lender NVR, whose stock price has fallen by 12% over the last six months.

Other stocks that may be actively traded include Tesla. The electric-car maker had a volatile week last week after one of its Model S cars caught fire, but after dropping 5%, it closed up by 4.4% on Friday, to end the week down by just 4%.

Finally, let’s not forget the Dow's daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: "The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions."

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> Roland does not own shares in any of the companies mentioned in this article.