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History Shows Stock Market Disregards Debt Limit, Shutdown Talk

  • But Goldman says keep an eye on government-dependent companies
  • S&P 500 rose during the shutdown in the winter of 2018: BI
House Speaker On Center Stage With White House's $4 Trillion Agenda At Risk
Photographer: Ting Shen/Bloomberg

Stock investors tend to ignore debates over the U.S. debt limit and a potential government shutdown, content that Congress will eventually pass essential legislation. While analysts at Goldman Sachs Group Inc. expect a repeat in the next month, they warn that shares of companies most-dependent on government revenue could suffer.

Democrats, who have slim majorities in the House and Senate, have proposed legislation that links a suspension of the debt limit to a so-called continuing resolution to allow the government to keep spending past the Sept. 30 end of the fiscal year. Republicans are offering little support, raising alarms from Treasury Secretary Janet Yellen that delaying a debt limit resolution could cause a disastrous default.