On day two of government shutdown, stocks open lower, a lackluster jobs report, and a White House-Wall Street summit meeting. Read about these and other of the day's top business news stories.
Stocks Open Lower on Day Two of Government Shutdown
The Dow Jones industrial average fell about 80 points or 0.6 percent at the opening bell as the government shutdown entered its second day The Standard & Poor's 500 index was down 0.7 percent and the Nasdaq composite index dropped 0.6 percent.
ADP Jobs Report Shows Slow But Steady Growth
The ADP jobs report took on greater meaning Wednesday because of the government shutdown, which will cause the Bureau of Labor Statistics to skip its monthly non-farm jobs count for September. That report, which would usually be released on Friday, is considered to be one of the leading economic indicators. The ADP report now becomes the only employment news the market can use to gauge the success of the American economy. me in with lighter-than-expected private sector job creation numbers. ADP and Moody’s Analytics had the monthly total of jobs created at 166,000, lower than estimates of 180,000. In the ADP report, small businesses led the way in job creation with 74,000, while large companies added 64,000 and medium-sized companies added 28,000. The service sector, which includes bar and restaurant jobs as well as professional assistants, had the greatest growth, a jump of 147,000 new jobs.
Obamacare a Big Hit; Too Many Hits
With its fate remaining a topic of Congressional discussion, the Affordable Care Act, also known as Obamacare, had a reportedly spectacular first day of business, as millions of Americans signed up, or tried to sign up, for individual health care with the law-created state insurance exchanges. The surge of applicants became overwhelming to the system, as many exchanges froze on-line, including the healthcare.gov portal that the federal government had set up to operate exchanges for 36 states. Between midnight Monday night and late Tuesday afternoon, the federal website had nearly three million visitors, even though many of them had to wait to be connected to the system, or were unable to get on due to the demand. The Federal government did not put out actual numbers of visitors or Americans signed up Tuesday but two million New Yorkers visited that state’s website in the first two hours of operation. Initial enrollment to avoid penalty runs through March 31.
Treasury Tries to Pay its Bills
The U.S. Treasury Tuesday made key decisions in an attempt to push back the day the government runs of its legal borrowing authority. Treasury Secretary Jack Lew said his department was suspending some reinvestments of a government currency exchange fund and would also enter into a debt swap with the Federal Financing Bank and the Civil Service Retirement and Disability Fund, allowing the system to remain below its current $16.7 trillion debt limit for a little longer. Lew reiterated that the government will run out of its borrowing authority on Oct. 17 if the debt limit is not reached, leaving it with about $30 billion in cash to pay the nation’s bills. "If we have insufficient cash on hand, it would be impossible for the United States of America to meet all its obligations," Lew said in a letter to lawmakers. "For this reason, I respectfully urge Congress to act immediately to meet its responsibility by extending the nation's borrowing authority."
President Obama Scheduled to Meet Wednesday with Wall Street CEOs
CNN reports that Wall Street CEOs will meet at the White House Wednesday to meet with President Obama. The meeting was originally set up as part of the Obama administration’s ongoing efforts to mend relations with the financial services sector and attain their support on policy issues, CNN said. But the government shutdown, now in its second day, is expected to be the primary topic of conversation, Among those expected to attend the meeting are Goldman Sachs' Lloyd Blankfein, Bank of America's Brian Moynihan, J.P. Morgan Chase's Jamie Dimon and James Gorman of Morgan Stanley.
U.S. Car Sales Brake in September
U.S. auto sales dropped 4 percent from a year ago to just over 1.1 million in September, the Associated Press reports. The sales decline is attributed to a quirk of the calendar that saw Labor Day weekend transactions counted in August. The drop put the brakes on a 27-month streak of gains for the industry. General Motors, Honda and Volkswagen reported double-digit declines for last month, while Toyota, Nissan and Hyundai posted smaller decreases. Only Ford and Chrysler reported gains among the bigger automakers. Most industry officials viewed September as an anomaly. They also downplayed the impact of the government shutdown, assuming it's a short one and are forecasting a fourth-quarter rebound after a rare sales decline in September.
Postal Service Fails to Deliver $5.6 Billion Payment
The U.S. Postal Service has defaulted on a $5.6 billion payment for retiree health benefits that was due on Monday, just as the Postmaster General had warned it would, CNN reports. Postmaster General Patrick Donahue told the Senate Committee on Homeland Security and Government Affairs on Sept. 19 that the default was going to happen. Unlike other federal agencies, the Postal Service isn't funded by taxpayers, and is intended to function like a private business. In fiscal year 2012, the Postal Service lost a total of $15.9 billion, including $11.1 billion in defaulted payments that it owes to prefund health benefits for retirees. The Postal Service plans to cut 150,000 workers through 2015, and recently proposed a price hike for stamps. In addtion, the Postal Service hit its debt limit last year, which means that it cannot borrow any more money from the U.S. Treasury.