Markets drift as debt ceiling deadline looms - FOX13 News, WHBQ FOX 13

Markets drift as debt ceiling deadline looms

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    Friday, October 4 2013 3:43 PM EDT2013-10-04 19:43:45 GMT
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By PAN PYLAS
Associated Press

LONDON (AP) - Three days from a deadline to increase the U.S. debt ceiling, investors were fidgety Monday and stocks drifted lower.

The U.S. has to increase the amount of debt it can carry by Oct. 17 or face a possible default on its debt, a scenario that could derail the U.S. economic recovery and roil international markets.

Negotiations between Republicans and Democrats over the weekend failed to reach a conclusion either on the raising of the debt ceiling or the partial shutdown of the U.S. government, which has now entered a third week.

Despite the possible nightmare scenario of a U.S. debt default, markets have proven more resilient than many analysts thought.

"Like the fiscal cliff in 2012 and the last debt ceiling scare in 2011, the view remains that it will all work out, eventually," said Michael Ingram, market strategist at BGC Partners. "They are probably right of course, but it still feels that equity markets have been approaching this issue with unusual complacency."

In Europe, Germany's DAX was down 0.1 percent at 8,712 while the CAC-40 in France was down the same rate at 4,214. The FTSE 100 index of leading British shares was actually trading higher, up 0.2 percent at 6,498.

In the U.S., the Dow Jones industrial average was down 0.5 percent at 15,164 while the broader S&P 500 index fell the same rate to 1,696.

Despite the public holiday, developments in Washington remain the focus of attention in financial markets, with Senate leaders from both sides set for further discussions. Democratic Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell spoke by phone Sunday but failed to agree on a deal to raise the nation's borrowing authority above the $16.7 trillion debt limit.

Earlier, trading in Asia was muted, with markets in Tokyo and Hong Kong closed for holidays.

Outside of those major financial centers, China's Shanghai Composite Index rose 0.4 percent to 2,237.77 while South Korea's Kospi was off 0.2 percent at 2,020.27. Australia's S&P/ASX 200 shed 0.4 percent to 5,207.90.

Trading was also subdued in other financial markets. In currencies, the euro was up 0.3 percent at $1.3588 while the dollar fell 0.1 percent to 98.12 yen. In the oil markets, a price of benchmark New York crude was down 53 cents at $101.47 a barrel.

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