* Shutdown enters fourth day, investors watch debt ceiling
* Dow, S&P 500 on track for second straight week of losses
* Adobe Systems down; hackers stole source code, client data
* Futures up: Dow 6 pts, S&P 500 2.7 pts, Nasdaq 4.75 pts
By Ryan Vlastelica
NEW YORK, Oct 4 U.S. stock index futures pointed
to a slightly higher open on Friday, though the uncertain
outcome of a partial U.S. government shutdown continued to worry
The S&P 500 has fallen for nine of the past 11
sessions, with the losses driven by a budget stalemate in
Congress that has closed the government since midnight Monday.
The shutdown, which is now in its fourth day, appeared
likely to drag on for another week or more, with little sign of
progress towards a solution. Investors are also watching the
situation for how the upcoming debate over the debt ceiling
might play out.
While a short-term closure was expected to have a modest
economic impact, the effect is expected to become more
pronounced the longer it lasts.
Dennis Lockhart, president of the Federal Reserve Bank of
Atlanta, said the shutdown would hurt growth in the last quarter
of this year, while the Bank of Japan warned that a prolonged
budget standoff would have a severe global impact.
"We're oversold, but is this a bounce with some muscle, or
just a feeble move? This isn't a sign of health; a resolution
would give us a strong bounce," said Adam Sarhan, chief
executive of Sarhan Capital in New York. "Every day the shutdown
continues, it reduces the chances of a strong fourth-quarter
The debt ceiling issue is considered more severe, as it
could result in a default on U.S. debt if no resolution is
reached to increase it. On Thursday, the New York Times reported
that House Speaker John Boehner told colleagues he would not let
the United States default on its debt.
S&P 500 futures rose 2.7 points and were slightly
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
6 points and Nasdaq 100 futures rose 4.75 points.
While shutdown concerns have pressured equities over the
past two weeks, the S&P 500 index has frequently found
support at its 50-day moving average of 1,679.84, though it
closed slightly below that level on Thursday.
For the week, the Dow is down 1.7 percent and the S&P has
slipped 0.8 percent for a second week of losses for both
indexes, while the Nasdaq has shed 0.2 percent.
The CBOE Volatility Index, a measure of investor
anxiety, jumped as high as 18.71 on Thursday, its highest since
late June. The VIX had jumped 160 percent to 42.96 in the third
quarter of 2011 as the S&P 500 index fell 14 percent, the
biggest retreat since 2008.
Government economic data has been delayed because of the
shutdown, and the September payroll report was not released as
scheduled. About 180,000 jobs were expected to have been added
in September, up from 169,000 added in the previous month.
"Not getting key economic data really disrupts a normal
investment process. When you remove a key piece of data, it
becomes very difficult to navigate an already difficult
environment," Sarhan said.
Adobe Systems Inc shares fell 2.1 percent to $49.79
in premarket trading. On Thursday, the company said hackers had
stolen source code to some of its most popular software as well
as the confidential information of millions of its customers.
Twitter Inc gave potential investors their first glance at
its financials on Thursday when it publicly filed documents for
an initial public offering. The information showed that revenue
at the social networking company almost tripled in 2012, though
it posted a loss in the first half of 2013.
Potbelly Corp said late Thursday its initial public offering
of 7.5 million shares had priced at $14 each.
Union Pacific Corp gave a third-quarter earnings
outlook late Thursday that was below expectations, as flooding
in Colorado weighed on coal shipments.