STOCKS FALL, GOVERNMENT INCHES CLOSER TO SHUTDOWN: Here's What You Need To Know

Stocks fell, and the clock is ticking in Washington.

First, the scoreboard:

• Dow: 15,268.9, -59.3, -0.3%
• S&P 500: 1,691.9, -6.9, -0.4%
• NASDAQ: 3,781.8, -6.1, -0.1%

And now the top stories:

• If Congress can't get a budget deal soon, then we may see the government shut down at least temporarily starting October 1. "In the event of a government shutdown, functions of the federal government considered "non-essential" cease while "essential" functions continue," wrote Barclays' Michael Gapen and Michael Gavin. "Our economists estimate that for every week the government is shut down, real federal government consumption and gross investment falls 1.6% q/q saar and quarterly real GDP growth declines 0.1pp."
• Considering what appears to be a pretty worrisome situation, markets are holding up pretty well. "Little to no volatility premium is priced into the options market for the debt ceiling debates, in our view," said Goldman Sachs' Robert Boroujerdi noting the complacency. "S&P 500 put prices are near their lowest level since the financial crisis."
• In August, personal income climbed by 0.4% while spending increased by 0.3%. Both growth rates were right in line with expectations.
• The University of Michigan's consumer sentiment index fell to 77.5 from 82.1 in August. This was a bit worse than economists' expectation for a reading of 78.0. The economic outlook sub-index fell to 67.8 from August's 73.7 reading, but was also better than the September preliminary reading of 67.2. Inflation expectations one year ahead rose to 3.3% from 3.0% in August, while inflation expectations 5-years ahead inched up to 3.0% from 2.9%.
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