MARKET SNAPSHOT: Stocks Try To Shake Off Early Slump As Government Shutdown Stretches To 3rd Day

Strategist: 'History says that investors have little to fear from government shutdowns'

U.S. stock-market indexes fought to take flight Monday, with investors taking a cautious stance as partial government shutdown stretched in to a third day.

Strategists are saying shutdowns can weigh on the stock market, but they don't tend to bring about heavy selling.

What are the main benchmarks doing?

The S&P 500 was flat at 2,811 with eight of its 11 main sectors trading slightly higher. Gains were enough to push the broad-market benchmark to an intraday peak at 2,812.07. Energy shares were leading gains, up 0.5%, however industrials and materials were down by at least 0.4%.

The Nasdaq Composite Index was 10 points, or 0.1%, higher at 7,347.10, helping propel the technology-laden index an intraday record at above 7,347.42, thanks to a jump in biotechnology stocks. The iShares Nasdaq Biotechnology ETF (IBB) was up 1.8% fueled by a flurry of merger news in the industry (http://www.marketwatch.com/story/biotech-etf-rallies-on-merger-news-on-track-for-highest-close-since-2015-2018-01-22).

The Dow Jones Industrial Average meanwhile, declined 35 points, or 0.1%, to 26,036, but was off its opening low.

The three gauges have gained between 24% and 32% over the past 12 months, helped by an expanding U.S. economy, growth in corporate profits and enthusiasm over tax cuts for companies (http://www.marketwatch.com/story/stock-market-investors-eager-for-more-guidance-on-tax-cut-impact-2018-01-20).

What are strategists saying?

"History says that investors have little to fear from government shutdowns, as four of the seven in the past 35 years were accompanied by price declines that averaged only 1.0% and required less than two weeks to get back to break even," said Sam Stovall, CFRA's chief investment strategist, in a note late Sunday.

"We think this shutdown will also be a non-event," Stovall added.

See:This is what happens in the stock market when the government shuts down (http://www.marketwatch.com/story/heres-how-the-stock-market-has-handled-past-government-shutdowns-2018-01-16)

And read:A shutdown 'could reintroduce investors to the fact that markets go down' (http://www.marketwatch.com/story/a-government-shutdown-could-reintroduce-investors-to-the-fact-that-markets-go-down-2018-01-22)

What's driving markets?

Shutdown-related uncertainty appears to be weighing on markets, however. Lawmakers failed Sunday to end the federal government shutdown, as negotiations over immigration continued to roil Capitol Hill.

The Senate was expected to hold a procedural vote (http://www.marketwatch.com/story/compromise-seems-far-off-on-second-day-of-government-shutdown-2018-01-21) at noon Eastern Time on a measure that would keep the government funded through Feb. 8, but it wasn't clear if it would have enough support to advance.

Read:Traders lack 'an appetite to take action' as shutdown runs on--analysts react to impasse (http://www.marketwatch.com/story/traders-lack-an-appetite-to-take-action-as-shutdown-runs-on-analysts-react-to-impasse-2018-01-22)

Economic reports could be overshadowed or even delayed this week by the shutdown. On Monday, a reading on the Chicago Federal Reserve's national activity index rose to 0.27 in December from 0.11 in November.

Check out:GDP report could fall victim to government shutdown (http://www.marketwatch.com/story/gdp-report-could-fall-victim-to-government-shutdown-2018-01-19)

Also see:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

Which stocks look like key movers?

Apple Inc.'s stock (AAPL) traded 0.4% lower amid fresh concerns about iPhone X sales, with the worries weighing on the Silicon Valley giant's suppliers in Asia (http://www.marketwatch.com/story/asian-markets-unfazed-by-us-government-shutdown-2018-01-21).

Buyout news was lifting biotech stocks Juno Therapeutics Inc.(JUNO)and Bioverativ Inc.(BIVV) by 27% and 63%, respectively.

Celgene Corp.(CELG)said it plans to buy Juno for $9 billion (http://www.marketwatch.com/story/celgene-to-acquire-juno-therapeutics-for-9-billion-or-87-a-share-2018-01-22), and Sanofi SA(SAN.FR)(SAN.FR)said it would acquire Bioverativ for $12 billion (http://www.marketwatch.com/story/sanofi-to-acquire-bioverativ-for-116-billion-2018-01-22-24852329). Celgene shares fell 1.7%, while Sanofi shares dropped 4.1%.

In other deal news, BioCryst Pharmaceuticals(BCRX) and Idera Pharmaceuticals(IDRA) agreed to merge. BioCryst shares added 2.3%, while Idera sank 6.7%.

Insurance company Validus Holding Ltd.'s shares (VR) soared 44% after giant insurer American International Group Inc.(AIG)announced it is buying Validus for about $6 billion (http://www.marketwatch.com/story/aig-to-acquire-validus-for-556-billion-2018-01-22). AIG shares were down 1.2%.

Shares in Halliburton Co.(HAL)traded 2.6% higher after the oil-field services provider released better-than-expected quarterly results (http://www.marketwatch.com/story/halliburton-shares-rise-after-q4-profit-revenue-beats-2018-01-22).

Shares of Xerox Corp (XRX) rose 1.5% after The Wall Street Journal reported that the company's biggest and third-biggest investors, billionaires Carl Icahn and Darwin Deason, have formed an alliance and plan to encourage the printer and copier giant to explore a potential sale.

Streaming-video pioneer Netflix Inc.(NFLX)is due to report after the close. Shares of the company were up 1.8%.

See:Netflix earnings--did price increases send customers packing? (http://www.marketwatch.com/story/netflix-earnings-analysts-await-update-on-how-price-increases-are-affecting-growth-2018-01-17)

And read:As stocks rocket to records, Ameritrade to roll out round-the-clock trade (http://www.marketwatch.com/story/as-stock-market-rockets-to-records-td-ameritrade-to-roll-out-round-the-clock-trade-2018-01-22)

What are other assets doing?

The ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-holds-steady-as-investors-wait-for-shutdown-developments-2018-01-22)was modestly lower as traders waited for developments on the shutdown. European stocks (http://www.marketwatch.com/story/european-stocks-wobble-around-2-12-year-high-as-ubs-falls-washington-wrestles-2018-01-22)were trading slightly higher, and Asian markets closed mostly higher (http://www.marketwatch.com/story/asian-markets-unfazed-by-us-government-shutdown-2018-01-21). Gold futures and oil futures (http://www.marketwatch.com/story/oil-prices-edge-up-after-saudi-urges-producers-to-cooperate-into-2019-2018-01-22)were little changed.

Don't miss:H&M's stock has been cut in half over 3 years--here's how to play the retailer (http://www.marketwatch.com/story/hms-stock-has-been-cut-in-half-over-3-years-heres-how-to-play-the-retailer-2018-01-20)

(END) Dow Jones Newswires

January 22, 2018 09:59 ET (14:59 GMT)