Saturday 28/9/2013 -- Notes

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Subject: Saturday 28/9/2013

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Stocks were sharply lower Friday,

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Date Posted: 01:50:35 09/28/13 Sat

US Markets Market MoversDow 30NASDAQ 100SectorsStocks decline on Washington worries, Dow briefly drops 100
Text Size Published: Friday, 27 Sep 2013 | 10:38 AM ET By: JeeYeon Park | CNBC.com Stock Market Writer
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Stocks were sharply lower Friday, with major averages poised to finish lower for the week, following the latest consumer sentiment report and as mounting concerns of a potential government shutdown weighed on global markets.

"It's going to be a bit of a touch session," said Art Cashin, director of floor operations at UBS Financial Services. "It looks like we're going to have a [government] showdown on Monday and a showdown on Monday is a problem for traders and portfolio managers as it's the end of the quarter."

Dow Jones Industrial Average

Name Price Change %Change
DJIA Dow Jones Industrial Average 15252.87 -75.43 -0.49%
S&P 500 S&P 500 Index 1691.61 -7.06 -0.42%
NASDAQ Nasdaq Composite Index 3783.66 -3.77 -0.10%
The Dow Jones Industrial Average briefly dropped more than 100 points, dragged by Cisco and IBM.

The S&P 500 and the Nasdaq also slumped.

The Dow and S&P 500 are down more than 1 percent for the week.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 14.

Most key S&P sectors opened in the red, dragged by materials and industrials.
Play VideoWorking out the 'kinks' in Obamacare
Rep. Debbie Wasserman-Schultz, (D-FL); Bob Shrum, Democratic strategist, and Joe Watkins, Republican strategist, discuss the likely fallout from a government shutdown and delaying the Affordable Care Act.On the economic front, consumer sentiment fell to 77.5 in September, hitting its lowest in nearly five months, according to the Thomson Reuters/Unversity of Michigan's final reading on the overall index. The reading lower than the 78.0 economists had expected in a Reuters poll, but still higher than a mid-month preliminary reading of 76.8.

And household spending ticked up 0.3 percent in August, according to the Commerce Department.

Budget spending must be agreed by Congress before October 1, next Tuesday, to prevent a government shutdown which could involve federal employees facing unpaid temporary leave and a delay in the payment of military personnel. Most analysts expect a deal to be reached, even if it is at the last minute, since lawmakers are unlikely to want to risk any fallout at the 2014 Congressional elections.

The Senate will vote on Friday on a stop-gap spending bill which will exclude the healthcare defunding provision that was passed in the House of Representatives, which will essentially mean the bill going back to the House in its changed format for further consideration.

"A shutdown of a few days would probably have little impact (although perhaps no non-farm payrolls report next Friday!) but of course the longer the shutdown the more negative it becomes. For sure, the uncertainty and the debt ceiling aspect is probably already causing delays to business decisions. Given the perception in the U.S. that the Republicans are more to blame for congressional gridlock we expect them to blink first," said Bank of Tokyo-Mitsubishi's Derek Halpenny in a research note.
Play VideoWhere to find the best value in equity
Todd Horwitz, author and founder of averagejoeoptions.com, tells CNBC finding value in equities is getting harder because there are "a lot of problems worldwide" that needs to be solved first. The pullback came after gains in the U.S. overnight. Major benchmarks managed to snap a five-day losing streak, with sentiment boosted by positive economic data and reassurances from Republicans that they would not cause the government to shut down over the debt battle.

Meanwhile, the debt ceiling must also be extended to allow the Treasury to continue borrowing money and honor its debt repayments.

Reuters reported on Wednesday that Senior Republican Jeff Sessions said there would be no shutdown or government default. House speaker John Boehner said a Republican proposal was coming that would tie federal government spending cuts to a U.S. debt limit increase.

(Read more: Brawl in US Congress—should the world care?)

BlackBerry posted a quarterly loss of nearly $1 billion, as previously warned, which included a writedown for unsold Z10 smartphones, the company's latest device that the firm had hoped would reverse its struggling business. Earlier this week, BlackBerry signed a tentative $9-a-share agreement to be acquired by a consortium led by Fairfax Financial, its largest shareholder.

(Read more: Canada's Harper suggests BlackBerry deal review)

Nike spiked higher after the newly-minted Dow component posted quarterly results that exceeded Wall Street expectations, helped by strong sales in gains in North America and Europe. In addition, at least seven brokerages upped their price targets on the sports apparel retailer. Smaller rivals Under Armor and Foot Locker also rallied.

Lumber Liquidators plunged more than 10 percent after a report that federal authorities executed a search warrant at the hardwood flooring retailer's headquarters.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up Next Week:

MONDAY: Chicago PMI, Dallas Fed mfg survey, new Kindle ships
TUESDAY: PMI mfg index, ISM mfg index, construction spending, auto sales; Earnings from Walgreen, Global Payments
WEDNESDAY: Mortgage applications, ADP employment report, Bernanke speaks, Dell event; Earnings from Monsanto
THURSDAY: Challenger job-cut report, jobless claims, factory orders, ISM non-mfg index, natural gas inventories, Fed's Fisher speaks, Fed Gov Powell speaks, Fed balance sheet/money supply; Earnings from Constellation Brands
FRIDAY: Nonfarm payrolls, Fed's Kocherlakota speaks

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