There are already somenascent signs of market impact from the shutdown, with an index ofairline shares underperforming broader gauges. (Photo:Shutterstock)

(Bloomberg) –A growing group of analysts and investors iswarning that the U.S. government shutdown could soon hurtstocks.

Already confronting an increase in volatility, an uncertainoutlook for interest rates and a trade war that threatens to dampglobal growth, traders now have to factor in the economic effectsof the partial closure, in its record 27th day.

“The impact can become meaningful as the shutdown continues,”said Max Gokhman, the head of asset allocation for Pacific LifeFund Advisors. “The longer we go, the more we delve into unchartedwaters and, as we all know, this market hates uncertainty.”

There are already some nascent signs of market impact from the shutdown, with an index of airline sharesunderperforming broader gauges amid concerns that slowdowns inairport screenings will hurt demand for tickets.

But pessimists fear the impact could become more widespread asfederal workers miss out on paychecks, government bureaucracy slowsand the effects trickle out to the broader economy.

Terry Haines, Evercore ISI's head of political analysis, citedresearch in a note Thursday that found the shutdown could reducequarterly economic growth anywhere from 0.5 to 2 percentagepoints.

For all the hand-wringing, the overall market impact has beenlimited so far. The S&P 500 Index has gained 8.6 percent sincethe day before the closure.

Furthermore, U.S. equities have historically fared well aftershutdowns, demonstrating the negative economic impact isn't usuallyenough to derail a market rally on its own, according to an LPLFinancial Research note Thursday.

“It's important to recognize, however, that the current shutdownhas lasted for an unprecedented amount of time with no end insight,” the note said.

Analysts are bumping up their estimates for just how long thisshutdown will last. There's a 40 percent chance the politicalstalemate will extend into February as President Donald Trump andHouse Speaker Nancy Pelosi show no signs of softening theirresolve, according to Haines.

He previously predicted it would “very likely” be resolved bythe end of January.

“This is incrementally market negative because a longer shutdowncould begin both to have real economic impact and to negativelyaffect market sentiment,” Haines wrote.

The latest sign of potential trouble came in the LaborDepartment's most recent jobs data. While filings for unemploymentbenefits fell to a five-week low, initial filings by federalemployees jumped to 10,454 on an unadjusted basis in the week endedJan. 5, double the level in the week ended Dec. 29 and 10 times theamount reported in the week ended Dec. 22.

“Every day, I believe, investors begin to get a little moreinsight into the implications of a partial shutdown,” said KristinaHooper, the chief global market strategist at Invesco Ltd. “Wecould see it show up in diminished air travel and a whole host ofother areas that may not have even been considered just a few weeksago as potential victims of the shutdown.”

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