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Microsoft Investors Want Gates Out; Job Growth Disappoints

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Day two of the government shutdown and its beginning to look like we are heading for a debt ceiling fight.

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Stocks declined on Wednesday morning as the government shutdown went into its second day and private sector job growth trailed expectations in September.

Due to the government shutdown, the only major economic announcement this week is the ADP Employment report, and it was a dud. The payroll servicer counted 166,000 new jobs last month, missing expectations by 14,000. August's number was also revised down by 20,000 to 159,000.

The Mortgage Bankers' Association reported that mortgage applications fell 0.4% last week after jumping 5.5% in the previous week.

As it becomes clear that the next two weeks will see a historic fight over the debt ceiling, Treasury Secretary Jack Lew reiterated the October 17 deadline for default. Lew said that his agency was using extraordinary measures to stay below the debt limit, but the Treasury's cash reserves will dwindle to $30 billion by that date, when the United States will not be able to meet its debt obligations for the first time in its history. Investors are bracing for a possible recession or at least a massive decline in the stock market, like the one in the summer of 2011 when we last had a protracted debate on the debt ceiling.

This morning, stock futures headed for a negative open after posting gains on the first day of the shutdown. Dow (INDEXDJX:.DJI) futures were down 0.34% at 15,069. Futures on the S&P 500 (INDEXSP:.INX) declined 0.51% to 1,680.80 and Nasdaq (INDEXNASDAQ:.IXIC) gained 0.32% to 3,235.00.

Overseas stocks were mixed overnight with the Japanese Nikkei (INDEXNIKKEI:NI225) down 2.17%. European stocks are also lower as the European Central Bank voted to keep rates low. Today, Italian Prime Minister Enrico Letta will face a vote of confidence in parliament.

In corporate news, Reuters released an exclusive report saying that three of the top 20 investors in Microsoft (NYSE:MSFT) want Bill Gates out. They say that the widely respected founder's presence as chairman limits the next CEO from making big and necessary changes to turn the company around.

BlackBerry (NASDAQ:BBRY) said that it expects to write off $400 million in restructuring charges this year as it lays off nearly half of its workforce. The smartphone maker initially estimated charges of $100 million before revising the filing.

Alcoa (NYSE:AA) shares declined 2.7% after Deutsch bank downgraded the aluminum company to sell from hold.

A few speeches from Federal Reserve officials are still ahead. Chairman Ben Bernanke and St. Louis Fed President James Bullard will speak at the St. Louis Fed's Community Banking Research Conference.

Disclosure: Minyanville Studios, a division of Minyanville Media, has a business relationship with BlackBerry.

Twitter: @vincent_trivett
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No positions in stocks mentioned.
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