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US STOCKS-Wall Street to fall as Washington debt deadlines loom
September 27, 2013 / 1:19 PM / 4 years ago

US STOCKS-Wall Street to fall as Washington debt deadlines loom

* J.C.Penney stock slides after pricing of offering

* Nike shares jump a day after strong earnings

* Futures off: Dow 44 pts, S&P 7 pts, Nasdaq 11 pts

By Rodrigo Campos

NEW YORK, Sept 27 (Reuters) - U.S. stocks were set to fall at the open, with the S&P 500 and Dow poised to drop for the first week in four, as concerns grew over a lack of compromise in debt and budget negotiations by congressional lawmakers in Washington.

The lawmakers have yet to forge an agreement that would keep the U.S. government running and avoid a debt default. Investors are concerned about the implications of a shutdown and possible default on an already-fragile economic recovery.

“Concerns about a government shutdown are starting to create some tension and hesitation approaching the weekend,” said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

“Until there’s greater visibility, the market is going to be choppy and erratic.”

U.S. House of Representatives Republicans refused on Thursday to give in to President Barack Obama’s demand for straightforward bills to run the government beyond Sept. 30 and to increase borrowing authority to avoid a historic default.

The Republican-controlled House and the Democratic Senate are bouncing back bills, with each party anxious to pin responsibility for any economic damage on the other.

Meanwhile, the president of the Federal Reserve Bank of Chicago, Charles Evans, said the Fed could start reducing its asset purchases this year based on economic forecasts but the decision to wind back stimulus could be pushed into next year.

Several Federal Reserve officials are due to speak Friday, and markets will peruse their remarks with interest for clarity on the immediate future of the Fed’s stimulus program.

Influential New York Fed President William Dudley will speak on the economy in Syracuse, New York at 2:00 p.m. (1800 GMT).

Data showed U.S. household spending rose in August as incomes increased at their fastest pace in six months, signs that momentum could be growing in the U.S. economy despite months of harsh government austerity.

S&P 500 futures fell 7 points, dropping 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 44 points, and Nasdaq 100 futures lost 11 points.

J.C.Penney announced the pricing of its public offering of 84 million common shares priced at $9.65 per share. The stock fell 8 percent in premarket trading.

Nike Inc shares jumped 7.3 percent in premarket trading a day after the maker of sports clothes and shoes reported a stronger-than-expected quarterly profit.

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