Stocks rise, dollar weakens after U.S. shutdown; Treasuries fall

Global stocks rebounded after the biggest decline in a month and Treasuries fell on speculation any economic effect from the U.S. government shutdown will be limited and already reflected in markets. The dollar weakened. More

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Stocks rise, dollar weakens after U.S. shutdown; Treasuries fall

BLOOMBERG NEWS FILE PHOTO/JIM LEE
STOCKS ROSE TUESDAY and Treasuries fell following the Congressional stalemate that sent the federal government into shutdown. A Bloomberg analysis of the S&P 500 following government shutdowns since 1976 suggests the shutdown may be a buying opportunity for stock investors.
Posted 10/1/13

LONDON - Global stocks rebounded after the biggest decline in a month and Treasuries fell on speculation any economic effect from the U.S. government shutdown will be limited and already reflected in markets. The dollar weakened.

The MSCI All-Country World Index climbed 0.1 percent to 382.62 at 9:30 a.m. in New York. The Standard & Poor’s 500 Index advanced less than 0.1 percent after the benchmark index retreated 2.6 percent from its last record on Sept. 18. Treasury 10-year yields rose 1.3 basis points to 2.62 percent. Australia’s dollar strengthened against most major peers after the central bank left borrowing costs unchanged. The Bloomberg U.S. Dollar Index dropped 0.2 percent, crude oil retreated and corporate bond risk fell for the first time in five days.

Congress’s failure to pass a budget closed the government for the first time in 17 years, setting the stage for a debate on raising the U.S. debt ceiling within three weeks. The Bank of Japan’s Tankan survey on business confidence rose to the highest level in almost six years. A report on U.S. manufacturing today may show growth and factory output in the 17-nation euro area expanded for a third month.

“The news of a partial Federal shutdown has been received pretty calmly,” Kit Juckes, global strategist at Societe Generale SA in London, said in a note to clients. “The dollar will be weakened by the shutdown but will probably snap back sharply once it ends, as long as that doesn’t take more than a couple of weeks.”

U.S. shutdown

The partial shutdown will put as many as 800,000 federal employees out of work today, halting some government services after Congress failed to break a partisan deadlock. The Senate earlier voted 54-46 against a House funding bill linked to changes in President Barack Obama’s health-care legislation.

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