Global markets are starting to take notice of the lack of progress out of Washington, DC. Japan's Nikkei (^N225) fell 1.2% and Europe is down across the board as the world watches the U.S. budget stalemate. Here at home, the major averages are under pressure with the Dow (^DJI) falling triple digits in early trading.
While the U.S. government has now been shuttered for seven days due to Congress' failure to reach a budget agreement, the debt ceiling showdown is front and center. The U.S. Treasury is running out of time and money to pay the bills. We're expected 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.
Meanwhile, a couple of key decisions out of Washington are easing the burdens of the government shutdown. Nearly all of the Pentagon's 350,000 furloughed civilian employees will get back to work this week, in a surprise decision made by Defense Secretary Chuck Hagel. And in a rare Saturday session, the Republican-led House of Representatives voted unanimously to pass a bill offering full pay for government employees while they're not at their jobs during the shutdown. Senate Democrats intend to pass the bill early this week, and President Obama says he'll sign off on it.
STOCKS TO WATCH:
Blackberry (BBRY) shares are up 4% as the company works the room. The former smartphone titan is now in talks with Cisco (CSCO), Google (GOOG), and SAP (SAP) about selling all or parts of the company, according to a Reuters report. 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 their ability to finance the deal.
Tesla (TSLA) shares are up 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) is up 9%, adding to Friday's late-day gains 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.
Finally one analyst says Apple (AAPL) is finally ripe for the picking. Shares are up 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."