Closing Bell: Stocks Fall as Shutdown Drags On for Third Day
The Dow Jones industrial average (^DJI) fell 136 points, or 0.9 percent, to 14,996, the Standard & Poor's 500 index (^GPSC) lost 15 points, or 0.9 percent, to 1,678 and the Nasdaq composite index (^IXIC) slumped 40 points, or 1.1 percent, to 3,774.
Thursday's stock market losses marked a slight acceleration of gradual declines during the last two weeks. Stocks have logged modest declines on eight of the last 10 days as investors anticipated that negotiations over the federal budget would fail, forcing a partial shutdown and worker furloughs as of Oct. 1. If the shutdown persisted, they worried, the weak economic recovery could slow.
In Washington, the political gridlock showed no signs of ending. Republicans in the House of Representatives, pushed by a hard core of tea-party conservatives, are insisting that Democrats and President Obama accept changes to his signature health care reform law as part of a budget bill. Obama refuses to consider any deal linking the health care law to routine legislation needed to extend government funding, a position that has near-universal backing from Democrats in Congress.
%VIRTUAL-article-sponsoredlinks%In a speech President Barack Obama said there was only one way out of the shutdown: "Congress has to pass a budget that funds our government with no partisan strings attached."
In economic news, The Institute of Supply Management reported that sales fell sharply, new orders fell and hiring weakened at U.S. service companies, which cover everything outside manufacturing, including retail, construction, health care and financial services.
Defense companies, which rely on government contracts for much of their revenue, fell again. Lockheed Martin (LMT) dropped 1.9 percent to $122.75 and Northrop Grumman (NOC) fell 2.2 percent to $93.08.
In commodities trading, benchmark crude for November delivery fell $1.08 to $103.02 a barrel, while gold fell $3.20 to $1,317.40 an ounce.
In corporate news, Angie's List (ANGI) slumped 17.5 percent to $17.32, a day after The Wall Street Journal reported that the consumer review service was testing cutting its membership prices by 75 percent in several big U.S. cities. New members could pay $10 for an annual membership, down from around $40. On Thursday, however, the Journal reported that "the tests appear to have abruptly ended." The newspaper said it wasn't clear if the company raised prices to prior levels in all cities where the lower fees were being tested. It also noted that the company didn't respond to emails or calls seeking comment.
More Stocks in the News:
- Tesla Motors (TSLA) lost 4.2 percent to $173.29 after the electric car company had a rare downgrade from a financial analyst and on news of a fire involving one of its cars.
- Herbalife (HLF) tumbled 6.7 percent to $68.21 following news that activist investor Bill Ackman has reduced his short position against the nutritional supplement maker, while reasserting his argument that the company's business amounts to a pyramid scheme.
- PVH Corp. (PVH) climbed 4.2 percent to $122.50 after the clothing company announced that it is selling the G.H. Bass & Co. unit to G-III Apparel Group Ltd. (GIII) for about $50 million. PVH also raised its third-quarter adjusted earnings forecast.
- HCP Inc. (HCP) fell 4.6 percent, to $39.85 after the real estate investment trust fired James F. Flaherty as its chairman and CEO.
- CalAmp (CAMP), a wireless technology company, surged 14.2 percent to $21.34, after the company's third-quarter outlook came in better than Wall Street analysts had been expecting.
- Texas Industries (TXI) plunged 11.7 percent to $59.18 after the cement and building-materials supplier's first-quarter performance missed analyst expectations.
- Ulta Salon, Cosmetics & Fragrance (ULTA) rose 2.2 percent to $124.06 after a Citigroup (C) analyst increased his price target on the beauty company, calling it his most preferred stock due to its significant growth potential.
- The release of employment data for September from the Labor Department is postponed due to the partial government shutdown. No other economic reports are scheduled and no major companies are due to report quarterly corporate earnings.