U.S. stocks fell for the 7th session in 8 as the federal budget negotiations continue to weigh on stocks. The S&P 500 fell 0.6% and NASDAQ 0.3%. We continue to see the NASDAQ outperform the S&P 500 although there are starting to be some chinks in its armor as it can only diverge for so long from the DJIA and S&P 500, if selling continues in those indexes. At this point investors are torn as everyone knows the past history that stocks will rocket up the minute a resolution is passed, and most of the action now is saber rattling. In economic news:
The pace of business activity in the U.S. Midwest increased to 55.7 in September from 53.0 in August, according to the Institute for Supply Management-Chicago. A reading above 50 indicates expansion in the regional economy.
The volatility index continues to rise, bulls want to see this retreat.
Some recent winners in the internet set such as Zillow (Z) and Yelp (YELP) were hurt today.
On the flip side, Chinese names (along with volatile solar names) continue to return to favor for speculators - note Chinese travel name Ctrip.com (CTRP) which we have highlighted a few times of late.
Another reason investors don't want to flee en masse is precedent... per SentimenTrader.com
During the federal government shutdown from December 15, 1995, to January 6, 1996, the S&P 500 added 0.1 percent. During the November 13 to November 19, 1995, shutdown, the benchmark index rose 1.3 percent,