* Consumer staples lead decliners, all 10 sectors lower
* Report shows fewer private-sector jobs added in Sept. than
* Monsanto's stock drops after fourth-quarter loss, lower
* Indexes down: Dow 0.6 pct, S&P 0.5 pct, Nasdaq 0.3 pct
By Julia Edwards
NEW YORK, Oct 2 U.S. stocks fell on Wednesday as
a partial U.S. government shutdown entered its second day and
data showed private employers added fewer jobs than expected in
All ten S&P 500 sectors were lower, with consumer staples
stocks the weakest, off 1.1 percent. Dow component
Coca-Cola was one of the sector's worst performers,
losing 1.4 percent.
The federal government, except for essential services, came
to a halt on Tuesday after the Senate blocked a
Republican-backed bill from the House of Representatives that
would fund government agencies if the implementation of
President Barack Obama's healthcare law was delayed.
Despite a market bounce back on Tuesday, the political
wrangling in Washington has raised investor concerns that the
shutdown could be prolonged and sap Americans' confidence as
well as hurt economic growth.
"Yesterday, I think the market was just relieved that the
government shut down yet the sun still came up," said Erik
Davidson, deputy chief investment officer for Wells Fargo
Private Bank in San Francisco. "The second morning we're now
realizing the dysfunction in (Washington,) D.C. is going to be
continuing for a while."
Payrolls processor ADP said U.S. private employers added
166,000 jobs in September, below expectations for 180,000 jobs.
Investors were looking to this report for more guidance because
Friday's broader, government payrolls report will be delayed if
no deal on the budget is reached by then.
The Dow Jones industrial average was down 93.63
points, or 0.62 percent, at 15,098.07. The Standard & Poor's 500
Index was down 7.84 points, or 0.46 percent, at 1,687.16.
The Nasdaq Composite Index was down 12.38 points, or
0.32 percent, at 3,805.61.
Monsanto Co reported a fourth-quarter loss that was
wider than expected, and offered a lower outlook for 2014 even
as it said it was positioned for strong growth next year. Shares
fell 2.7 percent to $102.21.
Despite the recent declines, buyers have come in as the S&P
approached its 50-day moving average of 1,679.78. The moving
average represents a measure of the near-term trend in the
market and often investors will buy in clusters at such levels.
Market participants are watching the situation for an
indication of how an impending debate on the debt ceiling might
play out. Strategists are starting to see a greater likelihood
that the budget resolution becomes intertwined with the debt
limit issue. Without raising the debt ceiling, an unprecedented
debt default by the United States could result, which would roil
"More than likely the budget resolution issues are going to
bleed over into the debt ceiling issues," Davidson said.
The shutdown's impact on economic growth and market
volatility will likely increase the longer it continues.
Equity volatility has been on the rise, with the CBOE
Volatility index gaining more than 25 percent over the
past two weeks. On Wednesday the VIX was up 5 percent to 16.25,
still considered a low level.
Wall Street has managed to avoid steep declines during U.S.
government shutdowns in the past. During a shutdown from late
1995 to early 1996, the S&P 500 added 0.1 percent. During the
Nov. 13 to Nov. 19, 1995, shutdown, the benchmark index rose 1.3