Global markets are starting to take notice of the lack of progress out of Washington, D.C. Japan's Nikkei (^N225) fell 1.2% and European markets closed mixed as the world watches the U.S. budget stalemate. Here at home, the major averages all dipped nearly 1%.
While the U.S. government has now been shuttered for seven days due to Congress' failure to reach a budget agreement, it's the debt ceiling that's front and center weighing on investors. The U.S. Treasury is running out of time and money to pay the bills. The U.S. Treasury expects to breach the $16.7 trillion debt limit on October 17th, but Republicans and Democrats are as far apart as ever. House Speaker John Boehner says he won't allow a vote on raising the debt ceiling without serious cuts to the budget.
BlackBerry (BBRY) rose more than 3.5% on reports that the struggling smartphone maker is now in preliminary talks with Cisco (CSCO), Google (GOOG), SAP (SAP) and Samsung (SSNLF) about selling all or parts of the company. BlackBerry shares are down nearly 30% over the last one-month, despite reaching a preliminary agreement with Fairfax Financial several weeks ago, allowing the firm to take the company private in a $4.7 billion deal. However that bid is facing skepticism over its ability to finance the deal. BlackBerry was also upgraded to "neutral" by Macquarie Capital.
Tesla (TSLA) shares ended up over 1% after a wild ride for the stock which lost five-percent last week. This thanks to video of a "Model S" sedan up in flames after hitting a large metal object. The tape shows a fireball by the side of a road in Washington State. Now CEO Elon Musk is sounding off about the safety of his electric car, releasing a long statement last Friday afternoon. He states: "Had a conventional gasoline car encountered the same object on the highway, the result could have been far worse...there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid."
Outerwall (OUTR) pared significant gains to close more than 3.5% higher after Jana Partners disclosed a 13.5% stake in the company formerly known as "Coinstar." After shifting away from coin-counting machines, the company now operates a network of DVD rental kiosks such as the popular Redbox, often seen in shopping malls and grocery stores. Jana, an activist investment firm, says they're seeking strategic changes and a possible sale of the company.
Apple (AAPL) shares rose over 1% after Jefferies analyst Peter Misek upgraded the stock to "buy" from "hold" and raised the price target to $600. He says a trip to Asia last week where he met with suppliers indicated a "substantial shift in attitudes towards Apple."