FOX Business: Capitalism Lives Here

Mounting worries that Congress will use the debt ceiling as fodder in its high-stakes chess match sent the markets into the red.

Today's Markets

The Dow Jones Industrial Average slid 58.6 points, or 0.39%, to 15133, the S&P 500 dipped 1.1 points, or 0.07%, to 1694 and the Nasdaq Composite slid 3 points, or 0.08%, to 3815.

Congress may be seizing control of Wall Street. Market participants are growing increasingly wary that a deeply deadlocked Congress that already plunged the country into the first partial government shutdown since 1996 could conceivably allow a breach of the debt ceiling in mid-October. If the legislator doesn't increase the borrowing limit, the U.S. will likely default on certain obligations in a move that would have dire economic and financial impacts. 

"Given the U.S. government shutdown and fast-approaching debt limit deadline, volatility with a negative bias looks the likely mix for the markets in the days ahead," analysts at Barclays told clients Wednesday. The investment bank said the to watch the government shutdown fight as a proxy for the debt ceiling battle. 

In a sign of just how serious the government shutdown is becoming, President Barack Obama will cut short a long-planned trip to Asia. 

Wall Street was also parsing through data from payroll processor ADP. The U.S. private sector tacked on 166,000 jobs in September, up slightly from 176,000 in August, and modestly under estimates of 180,000. The data are taking on additional significance as it remains unclear as to if the Labor Department will release the all-important monthly jobs report on Friday. 

The Federal Reserve has tied its aggressive monetary policy to fluctuations in the jobs market. The central bank is looking for the economy to start adding jobs at a quicker clip before it begins tapering back its vast bond-buying program, and eventually boosting interest rates from record lows. 

Also on the central bank front, the European Central Bank held its benchmark interest rate steady at 0.5%, as expected.  The eurozone has been slowly recovering, but the ECB is expected to hold rates low until the pace picks up dramatically. 

In commodities, U.S. crude oil futures rallied $2.06, or 2%, to $104.10 a barrel. Wholesale New York Harbor gasoline rose 0.69% to $2.63 a gallon. Gold jumped $34.60, or 2.7%, to $1,321 a troy ounce. 

Foreign Markets

The Euro Stoxx 50 dipped 0.24% to 2926, the English FTSE 100 fell 0.56% to 6423 and the German DAX slumped 0.4% to 8654. 

In Asia, the Japanese Nikkei 225 sold off by 2.2% to 14170 and the Chinese Hang Seng rose 0.55% to 22984.

 

Follow Adam Samson on Twitter @adamsamson.