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September 27, 2013  Fri 7:14 AM CT

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Stocks are falling this morning on signs that a worsening political situation in Washington may lead to a government shutdown next week.

S&P 500 futures are off about 0.4 percent, while most of Europe is down about half a percent. Most Asian markets posted small gains in the overnight session.

The S&P 500 has been trending strongly higher all year and is now attempting to hold support near the top of the price range that's taken shape since May. While it's recently benefited from an improving global economy, uncertainty has been increasing in the United States.

One concern is the future of interest rates because the Federal Reserve surprised investors by not reducing monetary stimulus last week. That leaves questions about when and how it will remove support measures.

More importantly in the short term is passage of the budget and limits on the nation's debt. A budget needs to be passed by Tuesday, Oct. 1, to keep the government running. Republicans also raised the stakes yesterday evening by trying to link an increase in the debt ceiling to political goals such as spending cuts. That increases the likelihood of a default by mid-October.

The nervousness is driving up the price of safe-haven assets such as the Japanese yen and U.S. Treasury bonds. Gold climbed and silver rose about 1 percent, while copper is up half a percent. Oil is down fractionally and agricultural foodstuffs are mixed. Currencies associated with global growth--namely the Australian and Canadian dollars--fell, while the euro inched higher.

In addition to uncertainty about the budget, next week is heavy on economic news. It begins with manufacturing numbers from Asia, Europe, and the United States before focusing on key employment numbers later in the week. (See our related calendar story)

In company-specific news, Nike is indicated up 7 percent and Finish Line is climbing 10 percent after both companies reported better-than-expected quarterly results. IT consultancy Accenture dropped 5 percent after issuing weak guidance. Drug developer Nektar Therapeutics cratered 25 percent after its NKTR-181 pain killer failed to meet its primary endpoint in a Phase 2 study.
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