Stock market stalls as federal budget talks hit the wall
U.S. stock markets closed deep in the red Tuesday as politicians in Washington remained deadlocked over a deal to reopen the government and avoid default on its debts.
The Dow Jones Industrial Average shed 133.25 points (0.87 percent) at 15,168.01.
The broader S&P 500 fell 12.08 (0.71 percent) to 1,698.06, and the Nasdaq Composite lost 21.26 (0.56 percent) at 3,794.01.
Both the Dow and the S&P 500 broke four-day winning streaks.
Stocks extended their slide in the afternoon after early hopes for a breakthrough in the divided Congress had evaporated.
On the 15th day of a US federal government shutdown, the result of Congress’s failure to approve a budget for the 2014 fiscal year that began on October 1, Democrats and Republicans remained at loggerheads over the budget and raising the borrowing limit.
The US Treasury has warned that if Congress fails to lift the $17.6 trillion debt ceiling by Thursday, it will lose its ability to borrow and could run out of cash to pay all its obligations.
“We’re far from a deal at this point,” White House spokesman Jay Carney admitted.
Apple shares added 0.5 percent after it announced it was hiring the chief executive of British fashion house Burberry, Angela Ahrendts, as its new head of retailing.
Citigroup fell 1.5 percent after missing forecasts for its third-quarter results, blaming in part slower trading gains.
Earnings per share were $1.00 for the quarter, on revenues that jumped 30 percent from a year ago, to $17.9 billion, short of the $18.7 billion estimates.
Johnson & Johnson edged up 0.1 percent as it came in with a modest gain on earnings, net profits at $2.98 billion from $2.96 billion a year ago, and raised its full-year per-share forecast by four cents to $5.44-$5.49.
Coca-Cola fell 0.7 percent. The soft-drink maker posted third-quarter earnings that beat expectations, but revenues fell 2.5 percent under pressure from currency exchange rates.
Bond prices fell as the market reopened from Monday’s holiday. The 10-year Treasury yield rose to 2.72 percent from 2.68 percent on Friday, while the 30-year increased to 3.78 percent from 3.74 percent.
[Image via Agence France-Presse]