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STOCKS FALL: Here's What You Need To Know

Sam Ro   

STOCKS FALL: Here's What You Need To Know

capitol washington shutdown

REUTERS/Jonathan Ernst

John Zangas (L), who identified himself as a federal employee, and Janette Dunder (R) protest against the current government shutdown at the U.S. Capitol in Washington, October 2, 2013.

It's day two of the U.S. government shutdown.

First, the scoreboard:

  • Dow: 15,111.5, -80.1, -0.5%
  • S&P 500: 1,691.2, -3.7, -0.2%
  • NASDAQ: 3,811.6, -6.3, -0.1%

And now the top stories:

  • In a note to clients today, Goldman Sachs' Alec Phillips explains that the biggest negative impact from the government shutdown will come from the fact that employees won't be getting paid. "Compensation of federal employees is counted as federal consumption in the national accounts, so each day that federal employees do not go to work and are not paid results in a reduction in federal consumption," said Phillips. "For every day of shutdown, federal compensation in Q4 is reduced by $400 million, or $1.6 billion at an annual rate."
  • While the public data organizations are closed due to the shutdown, private data organizations continue to crank out vital information about the U.S. economy. Today, ADP released its monthly National Employmnet Report, which showed that U.S. companies added just 166,000 private payrolls in September. This was less than the 180,000 economists were forecasting. Even worse, ADP revised down its August estimate to 159,000 from an earlier estimate of 176,000. "At face value, the ADP report suggests the Fed was right to delay the tapering of its monthly asset purchases last month," said Capital Economics' Paul Ashworth.
  • Shares of electric car-maker Tesla tumbled today after an analyst downgraded the stock and a video of a fiery Model S circulated on the web. "Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle," said Tesla according to Jalopnik. "The car's alert system signaled a problem and instructed the driver to pull over safely, which he did. No one was injured, and the sole occupant had sufficient time to exit the vehicle safely and call the authorities."
  • Don't Miss: MORGAN STANLEY ECONOMIST: I Worry About A 1913 Scenario With Dire Consequences For The Global Economy »

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