Dow Futures Slide As Debt Deadline Draws Near

LONDON — Stock index futures at 7am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open down by 0.60% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open down 0.63%. Hopes that Republican and Democrat lawmakers would agree a debt ceiling deal over the weekend came to nothing, and negotiations are set to continue today, with just three days remaining before the October 17 deadline. CNN’s Fear & Greed Index remains in the fear zone, and is expected to open at 36 this morning, after closing at 35 on Friday.

European markets moved sideways this morning, as uncertainty over the US debt ceiling negotiations overshadowed news that eurozone industrial output rose by 1.0% in August. French carmaker Peugeot SA fell almost 10% this morning, on news that it may raise additional capital from China’s DongFeng Motor Corp and from the French government. In London, the biggest gainer was automotive catalytic converter manufacturer Johnson Matthey, which gained 4.0% after JPMorgan rated the firm’s shares as a buy. At 7am ET, the FTSE 100 was up 0.14%, the DAX was down 0.17%, and the CAC 40 was down 0.17%.

Today is Columbus Day and no major economic reports are scheduled. Most of this week’s key reports, such as September’s Consumer Price Index inflation and industrial production reports, are expected to be delayed unless the government shutdown ends very shortly, adding to the backlog of delayed reports from the last fortnight, which includes September’s non-farm payrolls report.

On the cards after the close tonight are earnings reports from Brown & Brown, DiamondRock Hospitality, Packaging Corp of America and J. B. Hunt Transport Services. Insurer Brown & Brown is expected to report third-quarter earnings of $0.40 per share, up from $0.36 per share in the second quarter, while J. B. Hunt Transport is expected to post earnings of $0.78 per share. Other companies that may be actively traded when markets open include General Motors, which was down 1% in pre-market trading this morning following the news that French automaker Peugeot SA, in which it has a 7% stake, may be required to raise additional capital from outside Europe. Citigroup was down by 0.8% in pre-market trading ahead of the bank’s third-quarter earnings announcement, which is due at 8.30am ET on Tuesday.

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.