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US stocks fall amid government shutdown

 
 
 
 
 
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The US stock market plummeted to its lowest level in almost a month as a federal government shutdown stretched into its third day on Thursday.

The Dow Jones industrial average dropped 135 points after the closing bell. The 0.9 percent loss forced the Dow index to close at below 15,000 points.

The broad-based Standard & Poor’s 500 index also fell 17 points, or 1 percent, to its lowest point since September 6.

Moreover, the dollar index, which measures the US currency against a number of other major currencies, continued to decline for a fifth day on Thursday.

On October 1, large functions of US government shut down as congressional Republicans and Democrats refused to agree on a temporary spending bill that would keep the government funded.

During a speech at a construction company in the Washington suburb of Rockville, Maryland, on Thursday, President Barack Obama blamed congressional Republicans for the government shutdown and urged Congress to “pass a budget that funds our government with no partisan strings attached.”

Meanwhile, US Congress faces a mid-October deadline for raising the federal government’s debt limit as the government is expected to exhaust its cash reserves by October 17.

According to Treasury Secretary Jack Lew, the nation’s current debt ceiling of $16.7 trillion will be reached by October 17. Lew has promised that he will have used up all extraordinary measures in order to stay below the debt limit by then. After October 17, the US government will have about $30 billion of cash on hand.

According to US law, the government cannot breach a certain debt limit and lawmakers must pass legislation to authorize the government to exceed that limit. If such legislation is not passed, the government cannot pay its bills.

Republicans are demanding the defunding or delaying of Obama’s signature Affordable Care Act, also known as Obamacare, in return for increasing the government’s ability to borrow more money.

“This whole thing is about one thing, the Republican obsession with the Affordable Care Act. That seems to be the only thing that unites the Republican Party right now,” Obama said during his speech in Maryland.

The US Treasury has warned of catastrophic effects if the political stalemate over raising the government’s debt limit forces a US default on its obligations.

The International Monetary Fund has also warned that a possible US default would wreak havoc on the global economy.

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