Stocks on Losing Streak Driven by Budget Deadline Jitters
NEW YORK ( TheStreet) -- Major U.S. stock markets fell Wednesday for a fifth session as the S&P 500 posted its longest losing streak since December, reflecting uncertainty about the strength of the economic recovery and a deal on the U.S. budget.
"As we move from one worry to the next worry, all that saber rattling that's going on in Washington D.C. ... that's disconcerting to people because we've had this very, very, very long rally, it's been way too long since we've had a correction, and the politicians are playing chicken," Erik Davidson, the San Francisco-based deputy chief investment officer for Wells Fargo Private Bank, which oversees $170 billion, said over the phone.
"Everything is going so well, the economy is going okay, profits are doing well, Europe is getting back on its feet, China seems to be working out okay, Syria seems to be doing okay, so many things are working and then you know, along come the politicians and they could if they're not careful ... this could become a game of chicken that goes quite badly."
While investors stay fixated on the heated debates on the continuing resolution financing the federal government, anxiety about a public default continued to weigh down the markets as well. On Wednesday U.S. Treasury Secretary Jack Lew urged lawmakers to raise the $16.7 trillion federal debt limit as soon as possible, warning that the U.S. will begin to fall short on the cash needed to pay its bills "no later than Oct. 17."
Durable-goods orders rose by a slightly better than expected 0.1% in August versus expectations that it would come in flat and after falling by a downwardly revised 8.1%, the Census Bureau reported. Orders excluding the transportation component fell 0.1% versus the expectation of a 1% rise and after declining by an upwardly revised 0.5%.