Government Shutdown Fears Spark 128-Point Dow Sell-Off
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Congress had a weekend to pull itself together and figure out a way to avoid a government shutdown before midnight tonight. But it looks like the federal government will be taking a leave of absence in just a few short hours.
Unless by some miracle lawmakers decide to pass a short-term spending bill this evening, nonessential sections of the government will close their doors for the first time in nearly two decades, a specter causing Wall Street to sell on fears of the economic ramifications. The Dow Jones Industrial Average fell 128 points, or 0.8%, to end at 15,129 on Monday.
Cisco Systems was the only Dow component to notch any meaningful gains, and even those were paltry for the day's performance leader. Edging up just 0.4%, Wall Street bid the stock modestly higher before its ex-dividend date tomorrow. The small boost most likely reflects investors with very short time horizons: Owners of the stock today are allowed to sell it tomorrow and still get the company's next quarterly dividend payment.
Sports apparel behemoth and Dow newcomer Nike ended up in the dredges of its new index Monday, losing 1.4%. Thankfully, today's performance isn't a reflection of Nike's business, which continues to print money across the globe. A 7% run-up at the end of last week after a blowout quarter, in addition to a weak consumer goods sector on Monday, gave the stock some room to fall.
United Technologies also lost 1.4%, which didn't help the average of the price-weighted Dow. United Tech, the seventh heaviest-weighted blue chip, declined despite just scoring more than $120 million in contracts from the Department of Defense on Friday. A cool $120 million deal should put any company on cloud nine, right? Unfortunately, that amount doesn't go quite as far as it once did, and investors may have been hoping for a larger slice of the nearly $11 billion in contracts the DOD awarded Friday.
Lastly, Procter & Gamble joins Nike as a laggard from the consumer goods sector. Shares of the $200 billion company dropped 2.1%, spoiled by rival Unilever's disappointing quarter. Citing emerging markets -- supposedly a source of great potential for these companies -- as projecting weakly into the future, Unilever sent shivers down the spines of P&G shareholders.
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The article Government Shutdown Fears Spark 128-Point Dow Sell-Off originally appeared on Fool.com.Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.The Motley Fool recommends Cisco Systems and Procter & Gamble. It recommends and owns shares of Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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