US Stock Futures Point To Higher Open As Investors Expect Policy Crisis Over Debt-Ceiling, Government Shutdown To End Wednesday

 
on October 16 2013 5:49 AM

U.S. stock index futures point to a higher open on Wall Street on Wednesday as news reports suggested that the Senate is close to brokering an eleventh-hour bipartisan deal, preventing a possible federal debt default and ending the partial government shutdown.

Futures on the Dow Jones Industrial Average were up 0.33 percent, while futures on the Standard & Poor's 500 Index were up 0.47 percent and those on the Nasdaq 100 Index were up 0.19 percent.

Senate leaders on Tuesday resumed talks about ending the impasse over increasing the debt-ceiling limit and ending the government shutdown, after the Republican-controlled House canceled a vote on their proposal to end the dual crisis. 

“Senator Reid and Senator McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach,” Senate Majority Leader Harry Reid’s spokesman Adam Jentleson wrote on Twitter.

The new Senate deal proposes that the government be funded at current spending levels through Jan. 15 and to extend the debt limit until Feb. 7, according to media reports. The federal government will default on its own debt if the national debt ceiling is not raised by Oct.17.

The dual policy crisis in the U.S. triggered sell-offs in European and Asian markets, which traded mostly lower on Wednesday.

The Stoxx Europe 600 index was down 0.42 percent, London’s FTSE 100 was down 0.45 percent, Germany's DAX-30 was down 0.13 percent and France's CAC-40 was trading down 0.74 percent.  

Meanwhile, inflation data from the euro zone for the month of September came along expected lines, with monthly inflation for the 17-nation bloc growing by 0.5 percent, up from 0.1 percent in August. Annually, inflation grew 1.1 percent in September, as forecast by analysts and down from 1.3 percent recorded in August, data released on Wednesday showed. UK’s unemployment rate for June-to-August period remained unchanged as expected at 7.7 percent.

In Asia, the Shanghai Composite index ended down 1.81 percent, Hong Kong’s Hang Seng Index lost 0.46 percent and South Korea’s KOSPI Composite index ended down 0.31 percent. Japan’s Nikkei ended up 0.18 percent and Australia’s S&P/ASX 200 ended up 0.07 percent. India’s BSE Sensex was closed for a national holiday.

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