* Lack of progress in U.S. debt, budget talks shakes
* Wall Street stocks lower, following equities elsewhere
* Dollar weakens against yen, near 8-month low against euro
By Herbert Lash
NEW YORK, Oct 7 The dollar and global equity
markets fell on Monday on growing investor concerns as the
impasse over the week-old U.S. government shutdown got entangled
in negotiations to raise Washington's borrowing limit or risk
default on U.S. sovereign debt.
A lack of progress by U.S. lawmakers in budget and debt
ceiling talks rattled investors, pulling stocks on Wall Street
down almost 1 percent and sending European shares to a
Republican House of Representatives Speaker John Boehner
vowed not to raise the U.S. debt ceiling without a "serious
conversation" about what is driving the debt, while Democrats
said it was irresponsible and reckless to raise the possibility
of a U.S. default.
The dollar fell, hovering near an eight-month low against a
basket of major trading currencies, and crude oil prices slipped
as the government shutdown and looming fight over the debt
ceiling clouded the economic outlook.
"Last week investors were hopeful that the government
shutdown would be short-lived," said Joe Manimbo, senior market
analyst at Western Union Business Solutions.
"Now that it's entering its second week, investors are
growing a bit more edgy and that's being played out in weaker
world stocks and the dollar staying on the defensive."
Stocks on Wall Street accelerated their decline just before
the market closed, as did a measure of global equities.
MSCI's all-country world index, which tracks
stock performance in 45 countries, was down 0.67 percent.
European stocks drifted lower in thin trading as the U.S.
budget impasse dragged on, pushing the FTSEurofirst 300
index of top regional shares down 0.21 percent to 1,241.09, its
lowest close in four weeks.
On Wall Street, the Dow Jones industrial average
closed down 136.34 points, or 0.90 percent, at 14,936.24. The
Standard & Poor's 500 Index slid 14.38 points, or 0.85
percent, at 1,676.12. The Nasdaq Composite Index fell
down 37.38 points, or 0.98 percent, at 3,770.38.
The benchmark S&P 500 has fallen for two weeks and is down
nearly 3 percent from its all-time closing high of 1,725.52
reached on Sept. 18.
Consumer discretionary and the financial
sectors were among the worst performers, down 1.40 percent and
1.20 percent, respectively.
"Thus far, investors have felt assured that they are
watching the re-run of an old cliffhanger movie, but the rising
frequency of the replay has instilled a sense of deja vu," said
Andrew Wilkinson, chief economic strategist at Miller Tabak & Co
in New York.
Investors flocked to perceived safe havens like the yen and
Swiss franc, driving the dollar to it weakest since mid-August
against the Japanese currency.
The dollar index fell 0.24 percent to 79.932, after
earlier trading at a low of 79.914, not far from an eight-month
low of 79.627 hit on Thursday.
The dollar fell 0.46 percent to 0.9030 Swiss franc.
The euro rose 0.14 percent to $1.3576. Against the yen
, the dollar fell 0.71 percent to 96.77 yen.
Crude oil futures on both sides of the Atlantic pared losses
after a sharp drop in earlier trade, following a report that a
key pipeline delivering crude oil from Cushing, Oklahoma, had
resumed shipping after an earlier outage.
Operations of the Seaway oil pipeline, through which crude
oil flows from Cushing to Gulf Coast refineries, resumed after a
brief shutdown, industry intelligence firm Genscape reported
early on Monday. Cushing is the delivery point for the U.S. oil
Brent pared losses to settle 22 cents higher at
$109.68 a barrel. The benchmark ended higher last week, snapping
a three-week losing run.
U.S. crude pared some losses, but still settled 81
cents lower at $103.03 a barrel.
U.S. Treasuries prices gained as lawmakers in Washington
showed no progress toward ending the partial government
shutdown. The benchmark 10-year U.S. Treasury note
was up 4/32 in price to yield 2.6302 percent.
Low-risk euro zone bonds pushed higher, with safe-haven
German Bunds outpaced the rest of the euro zone market. Bund
futures rose 35 ticks to settle at 140.31.