10-8-13 11:18 AM EDT | Email Article
 

By Barbara Kollmeyer, MarketWatch

 

NEW YORK (MarketWatch) -- U.S. stock futures edged higher on Tuesday after the previous session's selloff, with investors monitoring developments in Washington for signs of any progress in resolving the budget stalemate that has shut down the government for more than a week.

 

Futures for the Dow Jones Industrial Average (DJZ3) rose 20 points to 14,871, while those for the Standard & Poor's 500 index (SPZ3) rose 3.20 points to 1,670.90. Futures for the Nasdaq 100 index (NDZ3) rose 7.50 points to 3,212.50.

 

"Everyone is focusing on the politicians, and last night we saw a slight improvement in negotiations among Republicans and Democrats. It's nothing close to a final solution, but still a slight improvement," said Henrik Drusebjerg, strategist at Nordea.

 

Bloomberg News reported that Senate Democrats are planning a test vote on a measure that would allow President Barack Obama the power to raise the debt ceiling for a year. If all Senate Democrats and six Republicans vote to give Obama that authority, a debt-limit increase free of policy conditions could be sent to the House of Representatives just ahead of the debt-ceiling deadline of Oct. 17, pressuring House Speaker John Boehner. The report said four Republicans said they wouldn't rule out this option.

 

Closed-door meetings will also take place on Capitol Hill on Tuesday, with House Republicans and Democrats meeting separately, said media reports.

 

The Wall Street Journal reported Monday that the U.S. administration has begun warning consumers that it can't guarantee benefits will be paid in full if the debt limit is breached.

 

The S&P 500 (SPX) closed at a four-week low on Monday at 1,676.12, a drop of 14.38 points. The S&P 500 and other major benchmarks closed the day around 1% lower.

 

The International Monetary Fund on Tuesday warned that downside risks are building and urgent policy actions are needed to keep the global economy from getting mired in sub-par growth.

 

IMF economist Olivier Blanchard urged U.S. lawmakers to raise the debt ceiling, noting that a failure to do so would be "a major event."

 

While investors remain distracted by the shutdown and debt-ceiling worries, earnings season kicks off Tuesday with Alcoa Inc. (AA) and Yum Brands Inc. (YUM) both due to report earnings after the closing bell. Big banks such as J.P. Morgan Chase & Co. (JPM) report on Friday.

 

Shares of Talisman Energy Inc. (TLM) rose 8% in premarket after activist investor Carl Icahn disclosed a big stake in the oil and natural-gas producer Monday.

 

Shares of Tower Group International (TWGP) plunged 26% in premarket, matching losses in Monday's late trading session on Monday after Fitch Ratings cut the company's issuer default rating to B from BBB.

 

Shares of J.C. Penney Co. (JCP) rose 8% in premarket after the company said it's made "solid progress" on its turnaround, saying it saw an improving trend in September same-store sales.

 

Europe stocks slipped after data showed slowing growth in China's service sector.

 

Oil was pushing higher, while gold prices slipped.

-Barbara Kollmeyer; 415-439-6400; AskNewswires@dowjones.com

 

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(END) Dow Jones Newswires

10-08-13 1118ET

Copyright (c) 2013 Dow Jones & Company, Inc.
Copyright 2014 MarketWatch
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Morningstar - 2013/10/8 - UPDATE: Stock futures edge up; shutdown, Alcoa in focus
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