Market update: US default just 10 days away – 07.10.2013

Source: Henderson Global Investors

Wall Street ended the week higher, with the Dow Jones up 0.5% and the S&P 500 0.7% higher. US companies that depend on revenue from the government struggled, as the shutdown in Washington and forthcoming debt-ceiling debate weighed on equity markets. Defence contractors were among the worst hit, with Lockheed Martin falling 5.2% on the week. Meanwhile, shares in Facebook rose 3.8% after the company revealed that it would start to include advertisements in Instagram, the photo-centric social network that it bought for $1bn.

Asian markets were softer overnight with major bourses down across the board. The Nikkei and the Hang Seng were down 1.1% and 0.7% respectively.

European stocks are lower this morning with the FTSE 100 and the FTSE Eurofirst 300 down 0.8% and 0.9% respectively as the prospect of a US default in just ten days tempered investor sentiment. Rolls-Royce was one of only a few shares in positive territory after it reported winning two contracts worth up to $500m with the US government.