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Morning Market Update: Another Lacklustre Night

Concerns over a budget standoff in Washington triggered more declines on Wall Street overnight, with the S&P500 capping its longest losing streak of the year.

Investors are growing fearful that Congress and President Obama will fail to reach a deal that will avert a government shutdown by October 1.

Moreover, little headway has been made in negotiating an increase to the US debt ceiling, which is likely to be hit in mid-October and potentially ignite a new about of financial market turmoil.

The budget drama overshadowed data showing a rebound in durable goods orders last month, signalling US businesses are tentatively looking to expand despite the fiscal uncertainty.

The Dow Jones shed 62 points (-0.4%) to 15273, the S&P500 slipped four points (-0.3%) to 1693 and the Nasdaq dropped seven points (-0.2%) to 3761.

There were more losses in commodity markets Gold tallied a third consecutive decline on concerns the Fed will stick to its guns in tapering stimulus despite the US budget uncertainty.

Bullion futures fell 0.7% to US$1318 an ounce.

A surprise rise in weekly US crude inventories contributed to a fifth straight loss in oil prices. Additional selling pressure came from a UN speech by Iran’s President, which seemingly hosed down tensions in the Middle East. Front month oil futures settled 0.5% lower to US$102.66 a barrel.

The US dollar was mostly weaker against other currencies, with the exception of the Aussie, which fell 0.2% to 93.68 US cents on speculation the RBA has room for another rate cut by the end of the year.

There is no major economic data due for release today.


Morning Market Update: Another Lacklustre Night is a post from: Australian Stock Report Market Pulse Blog