- POSTED: 03 Oct 2013 05:08
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US stocks fell on Wednesday as the reality of the government shutdown depressed markets and raised concerns about the possibility of a US debt default due to political gridlock.
NEW YORK: US stocks fell on Wednesday as the reality of the government shutdown depressed markets and raised concerns about the possibility of a US debt default due to political gridlock.
The Dow Jones Industrial Average fell 58.56 points (0.39 percent) to 15,133.14.
The broad-based S&P 500 slipped 1.13 points (0.07 percent) to 1,693.87, while the tech-rich Nasdaq Composite Index gave up 2.96 points (0.08 percent) at 3,815.02.
The losses were a reversal from Tuesday, the first day of the partial government shutdown, when US stocks advanced on hopes that battling Republicans and Democrats in the US Congress would reach a budget compromise soon to fund operations.
But "hearing some of the rhetoric floating around, it has been pretty clear that both sides were pretty entrenched in their stances and that something was not going to get done within a day or two," said Michael James, managing director of equity trading at Wedbush Securities.
James said it remained likely that Congress would agree to raise the debt ceiling later in October to avoid a sovereign default. However, he added, "with things as acrimonious as they are in Washington right now, nothing would surprise me."
"There is going to be a lot of uncertainty and uncertainty usually breeds selling."
Fresh jobs data also dragged on stocks. Payrolls firm ADP said the private sector added 166,000 jobs in September, below what analysts had expected and too low to meaningfully reduce the jobless rate.
Among components in the Dow, some of the biggest losses were seen by American Express (down 1.5 percent), Coca-Cola (down 1.4 percent) and Merck (down 0.8 percent).
Agricultural business giant Monsanto fell 1.0 percent after quarterly losses came in at 47 cents per share, worse than the projected 43 cents per share. Monsanto also announced plans to acquire Climate Corp. for $930 million, an effort to boost its data analysis for customers.
Wells Fargo lost 0.6 percent after the New York attorney general, Eric Schneiderman, said he was suing the banking giant for violating a 2012 national settlement on mortgage practices. He also announced a settlement-related agreement with Bank of America, giving it 120 days to implement systemic reforms or face litigation. BofA rose 1.2 percent.
Auction house Sotheby's advanced 0.7 percent after hedge fund Third Point called for a new chief executive and a shake-up of the company.
Bond prices rose. The yield on the 10-year Treasury fell to 2.63 percent from 2.65 percent on Tuesday, while the 30-year dropped to 3.71 percent from 3.72 percent. Prices and yields move inversely.