US STOCKS-Futures fall as shutdown enters second day
* Govt shutdown enters second day with no end in sight
* ADP report may hold extra weight as some data delayed
* Top Microsoft investors urge Gates to step down
* Futures down: Dow 100 pts, S&P 8.3 pts, Nasdaq 10.5 pts
By Ryan Vlastelica
NEW YORK, Oct 2 (Reuters) - U.S. stock index futures fell on Wednesday as a partial government shutdown in Washington entered a second day, adding to concerns about when the issue might be resolved.
There were few signs that Congress was making progress in agreeing on a spending bill that would reopen operations. The Democratic-led U.S. Senate voted Tuesday to kill Republicans' latest attempts to modify an emergency funding bill, and sent a "clean" measure back to the House of Representatives that would extend funding for government agencies until Nov. 15.
U.S. Treasury Secretary Jack Lew late Tuesday said the Treasury had started using its last tools to push back the date when the government will run out of legal borrowing authority.
The shutdown's impact on economic growth and market volatility will likely increase the longer it continues. Market participants are also watching the situation for an indication of how an impending debate on the debt ceiling might play out. That issue is considered far more important for the economy, as it could result in an unprecedented debt default if not passed.
"There's a sense that the debate isn't going to end soon. Yesterday's rally was driven by a hope this wouldn't last, but that hope is diminishing," said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York.
Sectors tied to the pace of economic growth, including financials and materials, were the most volatile amid the uncertainty. Citigroup Inc fell 1.1 percent to $48.05 in premarket trading.
S&P 500 futures fell 8.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 100 points and Nasdaq 100 futures sank 10.5 points.
The S&P 500 has gained less than 0.2 percent over the past two sessions, a slight move that masks the volatility seen this week. Wall Street plunged on Monday as the deadline to keep the government open approached, then rebounded Tuesday on bets the government shutdown would be short-lived.
Wall Street has managed to avoid steep declines during similar incidents in the past. During the federal government shutdown from Dec. 15, 1995 to Jan. 6, 1996, the S&P 500 added 0.1 percent. During the Nov. 13 to Nov. 19, 1995, shutdown, the benchmark index rose 1.3 percent.
"Putting aside short-term volatility, which we're certain to experience as the shutdown continues, markets should rebound very quickly once we get past this," said Pursche.
Up to 1 million government workers remained on unpaid leave Wednesday as a result of the closure, with a fight over President Barack Obama's healthcare law at the center of the impasse. In addition, the shutdown delayed the release of government economic data, including August construction spending on Tuesday.
If no deal is reached by Friday, the closely watched payroll report will not be released, a prospect that could put more weight on the ADP employment report, scheduled for release Wednesday at 8:15 a.m (1215 GMT). About 180,000 private sectors jobs are expected to have been added in September, up 4,000 from the previous month.
Three of the top 20 investors in Microsoft Corp are lobbying the board to urge Bill Gates to step down as chairman of the software company he co-founded 38 years ago, according to people familiar with matter.
Shares of Alcoa Inc fell 2.8 percent to $7.94 in premarket trading after Deutsche Bank downgraded the stock to "sell" from "hold." The firm also upgraded Barrick Gold Corp to "buy," sending U.S. shares up 1.6 percent to $18.32 before the bell.
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