Markets Fall As Shutdown Seems Likely

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.

As the politicians argued in Washington about the federal government's budget, stocks across the board lost value today. Investors concerned about how a possible government shutdown would affect the economy sold off stocks, causing the three major indexes to all move lower this afternoon.

The Dow Jones Industrial Average ended lower by 128 points, or 0.84%, while the broader S&P 500 and Nasdaq moved lower by 0.6% and 0.27%, respectively. Not only are the other two indexes composed of a larger number of stocks than the Dow, but the Dow is also intended to give a snapshot picture of what the U.S. economy is doing -- and since that's the case, it would make sense that on a day when the U.S. government is on the verge of shutting down, a U.S.-focused index is a big loser.

Let's look at a few of the larger components that helped pull the index lower today.

Shares of Procter & Gamble ended today's session as the worst-performing Dow component, losing 2.1%. Considering Procter & Gamble's size ($207 billion market cap) and the products it sells (essential household items), to think a shutdown would affect P&G all that much is kind of silly. What's more likely is that the stock fell in tandem with Unilever -- the marker of Dove soap, Lipton tea, and countless other essential products similar to P&G -- when it warned investors that growth from emerging markets was slowing. Emerging markets are a big area for P&G and other brand-name global companies.  

Shares of United Technologies also slid 1.41% today. but unlike P&G's decline, this one was probably warranted. United Technologies gets a good deal of its business from the Defense Department, and a government shutdown could put a halt on new contract awards from DoD. But as I mentioned this morning, today may be a great buying opportunity for a number of stocks, and one of those great opportunities may be United Technologies. Even if DoD isn't awarding contracts during a shutdown, it will still be functioning, and that means planes and other vehicles will still need to be serviced.

Lastly, shares of UnitedHealth Group moved lower by 0.53%. With America's health-care system up in the air even as the Obamacare exchanges are set to open tomorrow, investors took some money off the table today. Taking profits and sitting back to see how things shake out is not a terrible idea right now.

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Fool contributor Matt Thalman has no position in any stocks mentioned. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513The Motley Fool recommends Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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