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October 3, 2013  Thu 7:10 AM CT

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Stocks are lower again today as battle lines harden between Republicans and Democrats in Washington.

S&P 500 futures are down about 0.4 percent and have been trying to climb in the last half hour. European markets are up slightly, and Asia was mostly positive in the overnight session.

Trading in the currency markets is optimistic as the euro inches higher and the safe-haven Japanese yen declines. Bonds are also falling, a potential sign of risk appetite.

The S&P 500 rebounded from an early drop of almost 1 percent yesterday to end the session little-changed. It's fallen in seven of the last nine sessions and is trying to hold support at its 50-day moving average. The mix of price action has remained modestly bullish even as the has market declined, with higher-risk stocks such as small caps and transports outperforming in the last week. Emerging markets and global names have also remained strong.

The government shutdown, now in its third day, will have little negative impact if it remains brief. The bigger danger is that a prolonged impasse will interfere with raising the country's debt ceiling later this month and create the risk of a default. A meeting yesterday afternoon between House Republicans, Senate Democrats and the White House produced little evidence that an agreement is near.

The shutdown has also interfered with the economic calendar and will likely prevent weekly jobless claims, factory orders, and natural-gas inventories from being released today. That leaves the Institute of Supply Management's service-sector index at 10 a.m. ET as the main item.

Economic news was positive from the Eurozone today: A survey showed the service sector growing at its fastest pace in more than two years, retail sales rose more than expected, and Italy's service sector exited a 27-month contraction.

The euro is posting small gains, while the Japanese yen is down across the board. Oil is little-changed, but Brent crude is climbing against West Texas Intermediate--a potentially positive catalyst for refiner stocks. Gold and silver both declined 1 percent, and copper is down two-thirds of a percent. Agricultural products are mostly higher.

In company-specific news, winemaker Constellation Brands is up 2.5 percent after profit beat expectations. Wireless-technology company CalAmp is gaining about 10 percent on a strong quarterly report, as well. Tesla Motors is down 2 percent and could be active after a fire destroyed one of its vehicles.
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