Closing Bell: Stocks Tumble as Talks on Shutdown, Debt Ceiling Stall
The Dow Jones industrial average (^DJI) slipped 133 points, or 0.9 percent, to close at 15,168, the Standard & Poor's 500 index (^GPSC) lost 12 points, or 0.7 percent, to 1,698, and the Nasdaq composite index (^IXIC) gave up 21 points, or 0.6 percent, to 3,794.
The Senate suspended negotiations until House Republicans work out their own plan to proceed on debt limit and government funding. The move comes as the U.S. government pushes closer to its borrowing limit on Oct. 17. Lawmakers have until Thursday to agree to raise the $16.7 trillion U.S. borrowing limit, or the country will commit an unprecedented debt default. Stocks dropped to lows of the day Tuesday on the news.
Markets have largely avoided steep losses due to optimism that lawmakers would agree -- eventually -- to end the partial government shutdown and raise the debt ceiling before time expires. At the same time, volatility in the markets has spiked as the deadline approaches with little obvious progress seen. The market was whipsawed Tuesday as the on-again, off-again talks in Washington left investors wondering whether the U.S. could avoid defaulting.
In economic news, data showed the pace of growth in New York state's manufacturing sector slipped this month to its slowest since May, but business optimism stayed strong.
In commodities trading, benchmark crude for November delivery fell $1.20 to close at $101.21, while gold, which is generally viewed as a safe haven in times of turmoil, nonetheless fell $3.40 to $1,273.
In corporate news, Lockheed Martin (LMT) said it plans to move production of its joint light tactical vehicle to an assembly line at its Camden, Ark., manufacturing plant, a move it says will help make the vehicle more affordable for the U.S. Army and Marine Corps. %VIRTUAL-article-sponsoredlinks%Prototypes of the vehicles were made at BAE Systems' Sealy, Texas, plant, but BAE plans to close that facility. Lockheed Martin stock fell $1.59 to $125.91 in trading Tuesday.
In earnings news, Citigroup (C) closed 74 cents lower at $48.86, after a wobbly day of ups and downs. The banking giant reported its earnings fell slightly in the third quarter, after a $1 billion drop in revenue from its bond trading business and a slump in mortgage refinancing. Revenue fell to $18.2 billion compared with $19.2 billion a year ago, while earnings amount to $1.02 a share, down from $1.06 a share in the year-ago period.
More Stocks in the News:
- Shares of J.C. Penney (JCP) slipped 71 cents to $7.16 on rumors that the struggling retailer had hired bankruptcy counsel. Company spokeswoman Kristin Kays said there was "no truth to the rumor," origins of which were unclear.
- Fedex (FDX) shares ticked up 4.1 percent to $120.08 after the world's No. 2 package- shipper said it has authorized a share repurchase program of up to 32 million of its outstanding shares of common stock.
- Teradata (TDC) fell 18.4 percent to $42.92, a day after the data analytics firm cut its full-year earnings forecast by about 10 percent.
- Johnson & Johnson (JNJ) reported stronger-than-expected quarterly results on strong growth for its prescription drugs. The stock rose 0.1 percent to $89.93.
- Coca-Cola (KO) reported higher earnings and lower revenue, helped by strong global sales of its Coca-Cola brand products. But the stock fell 0.6 percent to $37.69.
- Invesco (IVZ) slipped 6.4 percent to $32.42 after the investment management company announced Neil Woodford, the head of U.K. equities for Invesco Perpetual, will be leaving the company in April. Woodford said in a statement that after he leaves Invesco, he plans on creating a new fund management business serving institutional and retail clients.
- DexCom (DXCM) rose 1.5 percent to $29.47 after an analyst started covering the medical device company with a "Buy" rating, forecasting strong sales of its newest blood-sugar monitoring system.
- The National Association of Home Builders releases housing market index for October at 10 a.m. Eastern time
- The Federal Reserve releases its Beige Book survey of regional economic conditions at 2 p.m.