No Signs of Government Shutdown Worries in Stock Markets (+video)
Photo Credit: AP
Stock markets opened higher Tuesday morning after Congress failed to authorize spending overnight. The S&P 500 and Dow Jones Industrial Average gained over the first half of the day, and the Nasdaq composite index also increased by over a percentage point.
To some extent, those gains reflected the fact that markets had already priced in the impact of a shutdown, which was viewed as likely by Monday afternoon when Republicans and Democrats remained far from a deal, if not by the close of business Friday before Congress’ weekend deliberations.
Nevertheless, said Craig Alexander, the chief economist for TD Bank Group, the morning showed “very sanguine movement, so clearly no deep fear in the markets.”
Private-sector economists have said the lapse in government spending could modestly reduce economic output for the quarter, and that a shutdown of longer than a month could start to disrupt the broader economy more significantly as government services were missed.
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