Shutdown Weighs on Stock Market

By ABC News

Oct 7, 2013 8:13am

Morning Money Memo…

 

By JOHN KAPETANEAS

The debt limit debate to continue as shutdown enters week two. Investors are beginning to show fears that the standoff will compound market volatility. Dow, S&P and NASDAQ futures were all negative heading into Monday’s trading session. Speaker John Boehner told ABC’s George Stephanopoulos yesterday that the House will not increase the debt ceiling without other provisions being added to the bill. Meanwhile, corporate earnings season officially begins this week.

Moody’s says the chance of US default is “very low.” CEO Ray McDaniel told Bloomberg Television on Saturday that the effects of a government shutdown “may not be particularly damaging in the short term.” These sentiments were predicated on confidence that there would be a resolution of the debt ceiling, much as there was in 2011. The US is set to hit its debt ceiling limit on October 17 and a default will follow unless politicians reach a deal.

Japan Airlines will purchase $9.5 billion worth of Airbus jets. This morning, JAL announced that they would buy as many as 31 A350 wide-body jets to add to their fleet, with the option to buy 25 more. Delivery is expected to begin in 2019. The move is a blow to Boeing Corp., which competed for the contract and has been hampered by glitches with its new fuel-saving 787 Dreamliner.

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