CMC Markets Weekly Report

Stocks in the US finished broadly lower Monday, with the Dow hitting a one-month low, as the government shutdown dragged for a second week and as investors grew worried that lawmakers may not be able to increase the debt ceiling, potentially leading to a default.

Stocks in the US finished broadly lower Monday, with the Dow hitting a one-month low, as the government shutdown dragged for a second week and as investors grew worried that lawmakers may not be able to increase the debt ceiling, potentially leading to a default.

The Dow Jones Industrial Average slumped 136.34 points to finish at 14,936.24. The S&P500 dropped 14.38 points to close at 1,676.12, And the Nasdaq fell 37.38 points to end at 3,770.38.

This week, the shutdown is likely to continue to disrupt the flow of official economic data, meaning third-quarter earnings may garner extra attention as a means of gauging the state of the recovery.

On the economic front, consumer credit rose by $13.63 billion in August to $3.04 trillion, according to Federal Reserve data. Economists polled by Reuters had expected consumer credit to rise $12 billion after a previously reported $10.44 billion increase in July.

In commodity markets, Oil prices fell following continued pressure form the political paralysis over the budget in Washington, as the partial government shutdown entered the second week. US crude benchmark West Texas Intermediate for November delivery fell 81 US cents to $US103.03 a barrel on the New York Mercantile Exchange. European benchmark Brent oil for November delivery rose 22 US cents to $US109.68 a barrel.

Gold prices climbed as jitters over the continued US budget stalemate fanned interest in the haven asset. The most actively traded contract, for December delivery, on Monday rose $US15.20, or 1.2 per cent, to settle at $US1,325.10 a troy ounce on the Comex division of the New York Mercantile Exchange. In base metals Copper futures closed slightly lower on the London Metal Exchange (LME) as investors were kept on edge by the drawn-out US federal government shutdown. At the PM kerb close on Monday, LME three-month copper was down 0.2 per cent at $US7,245 a metric tonne. Aluminium was up 0.5 per cent at $US1,853 a tonne.

The Aussie dollar rose from lows near US93.85c to end the session at US94.25c

Locally, the market closed almost one per cent lower in thin trade. The benchmark S&P/ASX200 index was 46.9 points, or 0.90 per cent, lower at 5,161.1. The broader All Ordinaries index was down 45.3 points, or 0.87 per cent, at 5,160.6.

Ahead in Australia, The Australian Bureau of Statistics (ABS) releases figures for August overseas arrivals and departures as well as internet activity data for June quarter 2013. In the US, trade data may be released while chain store data is issued.