Dow Slides for Fifth Straight Day
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The Dow Jones Industrials Average slid another 0.4% today, bringing its total decline over the past five trading days to 2.6%. The S&P 500 fell 0.3% for the day.
The Treasury Department reported today that the extraordinary measures it's been taking to buy more time for Congress to come up with an act to reach an agreement on the debt ceiling will run out on October 17. Without an agreement, Treasury wouldn't have the authority to pay its bills. Moody's, which upgraded U.S. debt in July partly because of rapidly shrinking budget deficits, warned yesterday that breaching the limit would be expected to damage the economy and financial markets.
Separately, the Senate voted to begin debate on a bill to keep the government open after a 21-hour delay by Texas Republican Ted Cruz. The Senate is expected to pass a bill to keep the government without gutting Obamacare, which would then go back to the House.
It'll be interesting (or painful and mind-numbing, depending on your perspective) to see how it all gets resolved. September has seen the release of several iffy economic reports, and a government shutdown or financial crisis probably wouldn't help the recovery much. Tomorrow, we'll get to see second quarter's GDP numbers. Economists expect growth of roughly 2.5%. The research firm MacroAdvisors forecasted today that a two-week government shutdown would directly reduce GDP growth by 0.3% in the fourth quarter, not counting any fallout in the private sector. Damage from failing to raise the debt ceiling would be "far greater."
The biggest loser in the Dow today was Wal-Mart , which declined 2.5%. Bloomberg reported yesterday that the company is cutting orders to respond to rising inventory levels. The retail giant known for its aggressive cost-cutting on employees has faced problems with inadequately stocked stores.
Because of how quirky the Dow is calculated, Visa's 1% decline took the biggest toll on the Dow. One of the Dow's newest members, Visa agreed this week, along with Mastercard , to French authorities' demands to cut the interchange fees it charges there. Both card companies have also had to cut fees in the U.S. as well because of provisions in the 2010 Dodd-Frank Act. Interchange fees are usually earned by banks rather than card companies.
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The article Dow Slides for Fifth Straight Day originally appeared on Fool.com.Ilan Moscovitz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of MasterCard and Visa. 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.