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Morning Market Update: Global Markets Slide Further

The downbeat mood on global markets continued overnight, with US stocks extending their slide as the government shutdown rolled into a third day.

Stocks spiralled lower in the early moments of trading after President Obama reiterated that he would not meet Republican demands in exchange for operating the government.

The ongoing standoff has spooked investors, who fear that US politicians will struggle to hammer out a deal that will avert a calamitous default in two weeks time.

It wasn’t all bad news, however, with stocks recovering from their lows after a measure of services activity missed expectations, raising hopes the Fed will delay the start date of stimulus tapering.

The Dow slumped 137 points (-0.9%) to 14996, the S&P500 fell 15 points (-0.9%) to 1679 and the Nasdaq shed 41 points (-1.1%) to 3774.

Commodities were mostly weaker, with oil marking its fourth losing session in five on concerns the US budget standoff will deal a blow to economic growth and hurt energy demand.

Oil futures dropped 0.8% to US$103.31 a barrel whilst gold slipped 0.2% to US$1318 an ounce.

US dollar weakness was again the theme in currency markets. The greenback fell against most of its major rivals due to the shutdown and weak services activity data for September.

There is no major economic due for release today.

Morning Market Update: Global Markets Slide Further is a post from: Australian Stock Report Market Pulse Blog