Stocks fall as US fiscal worries linger Wednesday 21:15 BST. Global equities and the dollar slipped while Treasury bonds and the yen attracted buyers as the US government shutdown entered a second day, heightening concerns that the country's budget crisis might not be resolved before the country's debt ceiling is reached. A disappointing US private-sector jobs report added to the mood of uncertainty, particularly given the likelihood that official non-farm payrolls figures for September will not be published on schedule this Friday. Across the Atlantic, investors found some diversion from Washington's budget stalemate in a remarkable political U-turn in Italy and the European Central Bank's latest policy meeting. Wall Street managed to recover some of its early losses in late trading, and the S&P 500 closed just 0.1 per cent lower ahead of talks between President Barack Obama and congressional leaders at the White House. The S&P's modest decline followed a 0.8 per cent rise on Tuesday as equity markets appeared to take the view that the government shutdown would prove to be shortlived. Across the Atlantic, the FTSE Eurofirst 300 fell 0.7 per cent, while the Nikkei 225 in Tokyo tumbled 2.2 per cent, its biggest one-day fall in six weeks, as the yen touched its highest level against the dollar for five weeks. Japanese investors also appeared to find little to cheer in the government's latest stimulus plan. The dollar suffered a broad sell-off, hitting its lowest level against a weighted basket of currencies since February, as worries grew that an extension to the US borrowing limit might not be agreed in time for the Treasury to avoid a technical default. "The US government shutdown will likely be relatively shortlived, but there is a risk that it could drag on for some time and complicate efforts to increase the debt limit in a timely fashion," said Brian Smedley, rates strategist at BofA-Merrill Lynch. The release of a jobs survey from payrolls processor ADP showing that private sector employment increased by a relatively disappointing 166,000 in September did little to help the dollar's cause. "At face value, the ADP report suggests the Federal Reserve was right to delay the tapering of its monthly asset purchases last month," said Paul Ashworth at Capital Economics, although he noted the survey's patchy record in predicting the official non-farm payrolls numbers. The euro, meanwhile, touched an eight-month high against the dollar above $1.36 - although it too lost ground against the yen - as the European Central Bank left its main refinancing rate unchanged at its regular policy meeting. Mario Draghi, ECB president, admitted that a rate cut had been discussed, and he left the door open for all policy options, including the implementation of another longer-term refinancing operation. But some analysts suggested Mr Draghi's "dovishness" simply no longer carried sufficient weight. "Mr Draghi talks the talk, but is not yet walking the walk," said Nick Kounis, head of macro research at ABN Amro. It seems that press conference after press conference, the ECB is prepared to spend a lot of time talking about the tools it has to take action to ease financial conditions, but on each occasion stops short of action. Given this, market rates and the euro rose during the press conference. Meanwhile, Enrico Letta, Italy's prime minister, comfortably survived the recent attempt by Silvio Berlusconi to bring down the country's government. "In an absurd twist today - after many of his closest colleagues had suggested they would defy him - Mr Berlusconi himself made a last-minute U-turn and backed the prime minister," noted Chris Scicluna at Daiwa Capital Markets. Italy's 10-year government bond yield fell 7 basis points to 4.37 per cent while Italian equities climbed 0.7 per cent. The German Bund yield, meanwhile, showed little response to the ECB policy decision as it edged up 1bp to 1.81 per cent. But the 10-year US Treasury yield was down 3bp at 2.62 per cent, with the soft ADP data providing further support to buyers. Gold rallied strongly after sliding to a two-month low on Tuesday. The metal was up $30, or 2.4 per cent, at $1,316 an ounce. Industrial commodities were also on the front foot, helped by the weak dollar. Brent oil settled at $109.19 a barrel, up $1.25, while copper rose 1.1 per cent in London to $7,279 a tonne.