* U.S. government shutdown could hurt markets if prolonged
* Wall Street coming off strong gains in September, third
* Berkshire to get nearly $2.15 billion in Goldman stock
* Futures up: Dow 39 pts, S&P 5 pts, Nasdaq 8.5 pts
By Ryan Vlastelica
NEW YORK, Oct 1 U.S. stock index futures were
higher on Tuesday, indicating a positive start to the fourth
quarter, though concerns remained following a partial shutdown
of the U.S. government.
Congress missed a midnight deadline to agree on a spending
bill, resulting in up to 1 million workers being put on unpaid
leave. The release of the government's report on construction
spending in August, which had been scheduled for 10 a.m, has
"People expect this will be relatively short-term, with the
impact hopefully minimal, but the longer it goes on, the more
pressure Washington will face," said Robert Pavlik, chief market
strategist at Banyan Partners LLC in New York. "If this lasts
longer than a few days, you'll really start to see volatility
Markets had maintained some hope that a shutdown could be
avoided, and shares plummeted on Monday as the deadline
approached without any stalemate being broken. However, some
market participants viewed any pullback as a buying opportunity,
and Monday's early losses were trimmed.
While an extended shutdown could weigh on economic growth
and consumer confidence, a quick resolution may have limited
impact. In addition, a resolution here could ease tensions for
the congressional debate over the debt ceiling in mid-October.
That issue, which could result in a default on U.S. debt if not
resolved, is considered more serious for markets.
"It was expected that the debt ceiling is when Republicans
would circle their wagons; it is preferable that the budget
battle be done now rather than there being a showdown over
that," said Pavlik.
S&P 500 futures rose 5 points and were above 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 added 39
points and Nasdaq 100 futures rose 8.5 points.
While the S&P 500 traded under its 50-day moving
average for much of Monday's session, it recovered some of its
losses late in the day and closed above the level, suggesting
some near-term support.
Equities have been strong performers recently, with major
indexes climbing more than 2 percent in September. In the third
quarter, the S&P rose 4.7 percent and the Nasdaq soared 10.8
percent in its biggest quarterly gain since the first quarter of
Walgreen Co reported fourth-quarter earnings that
beat expectations, helped by a rise in generic drug sales.
Warren Buffett's Berkshire Hathaway Inc will
receive Goldman Sachs Inc stock worth nearly $2.15
billion on Tuesday through warrants acquired as part of a deal
originally signed during the depths of the 2008 financial
Cooper Tire and Rubber Co shareholders have approved
the U.S. company's $2.5 billion sale to India's Apollo Tyres Ltd
, clearing a major step for the creation of the world's
seventh biggest tyre maker.
Overseas, tensions eased in Italy as dissent from within his
People of Freedom Party complicated Silvio Berlusconi's plans to
bring down the coalition government of Prime Minister Enrico
Letta. Data showing European factory activity grew for the third
month in September also lent support to equities.