CMC Markets Weekly Report

Stocks in the US finished in negative territory on Friday, with major averages closing lower for the first week in four, as mounting concerns of a potential government shutdown spooked Wall Street.

The Dow Jones Industrial Average fell 70.06 points to finish at 15,258.24.The S&P500 dropped 6.92 points to close at 1,691.75 and the Nasdaq slid 5.83 points to end at 3,781.59.

Budget spending must be agreed by Congress before October 1 to prevent a government shutdown which could involve federal employees facing unpaid temporary leave and a delay in the payment of military personnel. Most analysts expect a deal to be reached, even if it is at the last minute, since lawmakers are unlikely to want to risk any fallout at the 2014 Congressional elections.

The Senate passed a short-term spending bill that would help U.S. agencies operating after September 30th when the fiscal year ends. The measure must now be approved by the Republican-controlled House.

President Barack Obama said the Senate acted responsibly by voting to keep the government open and now it's up to Republicans in the House to do the same.

On the economic front, consumer sentiment fell to 77.5 in September, hitting its lowest in nearly five months, according to the Thomson Reuters/University of Michigan's final reading on the overall index. The reading lower than the 78.0 economists had expected in a Reuters poll, but still higher than a mid-month preliminary reading of 76.8. And household spending ticked up 0.3 percent in August, according to the Commerce Department.

In commodity markets, Oil prices have trended lower recently amid signs of diplomatic progress in resolving the West's concerns about Iran's nuclear program and Syria's chemical weapons. New York's West Texas Intermediate (WTI) for November closed at $US102.87 a barrel, down 16 US cents. Brent North Sea crude for delivery in November, the European oil benchmark, dropped 58 US cents to $US108.63 a barrel in London trade.

Gold futures rose amid growing worries over legislative gridlock in Washington and hopes of continued stimulus from the Federal Reserve. Gold was up 0.5 per cent on the week. The most actively traded contract, for December delivery, on Friday rose $US15.10, or 1.1 per cent, to settle at $US1,339.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

Base metals on the London Metal Exchange closed higher, after a senior Federal Reserve official said the bank may keep pumping money into the US economy beyond October. At the close of open-outcry trading in the London ring on Friday, LME 3-month copper was 0.7 per cent higher on the day at $US7,295 a metric tonne. Aluminum rose 0.9 per cent to $US1,840 a ton, while nickel closed 1.2 per cent higher at $US13,985 a tonne.

AUD fetching 93.16 US cents, 91.15 Yen, 69.11 Euro cents, 57.79 Pence.

In economic news on Monday, the Reserve Bank of Australia is due to release financial aggregates for July while the TD Securities-Melbourne Institute inflation gauge for September is due out. In the US, the Chicago purchasing managers index is released.

In equities news, NAB is expected to release online retail sales index for August while Funtastic (FUN) is slated to post full year results.