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In other major markets, oil (NYSEARCA:USO) sank 0.91 percent to close at $36.88.
On London’s ICE Futures Europe Exchange, November futures for Brent crude oil declined 77 cents (0.71 percent) to $107.00/bbl. (NYSEARCA:BNO).
December gold futures rose $17.10 (1.30 percent) to $1,333.40 per ounce (NYSEARCA:GLD).
Transports got stuck in traffic again on Wednesday, with the Dow Jones Transportation Average (NYSEARCA:IYT) declining 0.61 percent.
Nevertheless, the maritime subsector is doing extraordinarily well. Some of the stocks which we mentioned yesterday had another great session on Wednesday: DryShips (NASDAQ:DRYS) up 9.17 percent; Eagle Bulk Shipping (NASDAQ:EGLE) up 6.79 percent and Baltic Trading (NASDAQ:BALT) up 5.58 percent.
In Japan, stocks sank during the final minutes of trading when the exchange rate for the yen increased as the dollar weakened on fears of a government shutdown. The yen strengthened to 98.60 per dollar before the closing bell in Tokyo. A stronger yen causes Japanese exports to be less competitively priced in foreign markets (NYSEARCA:FXY). The Nikkei 225 Stock Average dropped 0.76 percent to 14,620 (NYSEARCA:EWJ).
Stocks retreated in mainland China after China Beige Book International joined ranks with Namura Holdings and Jim Chanos to raise doubts about the strength of the nation’s economic recovery. The Shanghai Composite Index declined 0.41 percent to 2,198 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index advanced 0.13 percent to end the session at 23,209 (NYSEARCA:EWH).
European stocks made a modest advance on Wednesday, after the National Institute of Statistics and Economic Studies (INSEE) reported that its French Business Climate Index rose 3 points to 94 in September (NYSEARCA:EWQ). The index remains slightly below its long-term average of 100. Airbus had a big day after three Chinese airlines ordered a total of 68 A320 planes. The Global Economy is Heating Up
In Germany, GfK reported that while its Consumer Climate Indicator for September remained unchanged at 7.0, its Economic Expectations Indicator jumped to 10.7 from August’s 1.8 (NYSEARCA:EWG).
The Euro STOXX 50 Index finished Wednesday’s session with a 0.15 percent advance to 2,927 – climbing further above its 50-day moving average of 2,809. Its Relative Strength Index is 66.49 (NYSEARCA:FEZ).
Technical indicators revealed that the S&P 500 remained above its 50-day moving average of 1,679 despite finishing Wednesday’s session with a 0.27 percent decline to 1,692. Its Relative Strength Index dropped from 56.60 to 54.28. Although the MACD remains above the zero line, it has assumed a declining trajectory, suggesting the likelihood of a further retreat.
For Wednesday, only two sectors managed to finish in positive territory and seven sectors finished in the red. The two sectors which managed to avoid falling were the materials sector and the financial sector.
Consumer Discretionary (NYSEARCA:XLY): -0.61%
Technology: (NYSEARCA:XLK): -0.15%
Industrials (NYSEARCA:XLI): -0.45%
Materials: (NYSEARCA:XLB): +0.26%
Energy (NYSEARCA:XLE): -0.02%
Financials: (NYSEARCA:XLF): +0.55%
Utilities (NYSEARCA:XLU): -0.68%
Health Care: (NYSEARCA:XLV): -0.78%
Consumer Staples (NYSEARCA:XLP): -0.84%
Bottom line: The stock market extended its losing streak to a fifth day as bad news from Wal-Mart combined with the ongoing frustration over Washington’s fiscal policy to discourage investors.
While many analysts, maybe most, think a government shutdown is unlikely, I think it's a growing possibility since the deadline is Monday, nothing is really happening and the downside isn't huge as estimated impact of a two week shutdown is a 0.3% decline in GDP.
Of course, this isn't about funding the government as much as it is about ideology and each side wanting to tie its agenda to the funding bill.
The more serious debate with much more serious ramifications is yet to follow with the government default now forecast for mid-October. Unlike the shutdown, a default would have real and serious outcomes for the global economy and financial markets.
A default is highly unlikely, but what we can expect is a white knuckle trip to the brink of disaster and intense volatility in U.S. financial markets over the next three weeks. Wall Street Sector Selector remains in "yellow flag" status, expecting possible trend change ahead.
September 25, 2013 
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