Growing concerns about the federal budget situation led to more stock selling Tuesday.
The Dow Jones Industrial Average fell for the fourth consecutive session, down 66.79 points to 15,334.59. The Nasdaq Composite Index eked out a gain of 2.97 points to 3,768.25, and the Standard & Poor’s 500 Index fell 4.42 points to 1,697.42.
A report from the Conference Board showed consumer confidence fell slightly in September as households grew cautious about the job market and their personal finances.
Gold was also lower, falling $10.70 to $1,316.30 an ounce and dropping 4 percent in the past three sessions. Oil slid 46 cents to $103.13 a barrel.
Red Hat Inc. (NYSE: RHT) slumped 12 percent after billings at the largest seller of the Linux operating system trailed estimates. Homebuilders gained 2.3 percent as a group after a report showed home prices increased by the most in more than seven years and Lennar Corp.’s (NYSE: LEN) profit beat analyst estimates. Applied Materials Inc. (Nasdaq: AMAT) advanced 9.1 percent to $17.45 after agreeing to buy Tokyo Electron Ltd. for about $9.39 billion in stock.
The S&P 500 initially fell as much as 0.4 percent after the Conference Board’s index of U.S. consumer confidence slumped in September to a four-month low. A separate report showed a gauge of manufacturing in the region covered by the Federal Reserve Bank of Richmond shrank in September.
The equity benchmark index erased earlier losses as President Barack Obama said recent overtures from Iran may offer a basis for a “meaningful agreement” to resolve the confrontation over the Persian Gulf nation’s nuclear program, one of the primary sources of instability in the Middle East. Iranian officials said the time isn’t right for direct contact between the two countries’ leaders.
Stocks turned lower in the last 30 minutes of trading as investors watched the debate in Washington over spending cuts. Senate Democrats offered a new proposal that funds the government through Nov. 15, complicating efforts to avoid a government shutdown in a week as Republican Sen. Ted Cruz began an extended speech in opposition to funding for the health care law.
Fed Bank of New York President William C. Dudley said Tuesday that the central bank may reduce the pace of its quantitative easing program in 2013 depending on the economy’s performance.
Stocks fell Sept. 20 as Fed Bank of St. Louis President James Bullard said policymakers may decide to reduce their monthly bond purchases at the meeting in October.
“There are so many different views from the Fed itself and there is no one voice that seems to be articulating a common message,” said Mark Freeman, who oversees about $15.8 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas. “What they ultimately created is uncertainty, and that’s never a positive for the market.”
Red Hat tumbled 12 percent, the most in the S&P 500, to $46.73. Billings, a predictor of future revenue, rose 8 percent in the second quarter from a year earlier to $376 million.
JPMorgan Chase & Co. (NYSE: JPM) fell 2.2 percent to $50.32 for the biggest retreat in the Dow. The lender resumed settlement talks with the United States as the government was preparing to sue the bank in California federal court, alleging it misrepresented the quality of mortgage-backed securities it sold from 2005 to 2007, according to a person familiar with the matter.
The bank offered to pay about $3 billion to settle an array of probes, the Wall Street Journal reported Tuesday, citing a person familiar with the matter.
Carnival Corp. (NYSE: CCL) slipped 7.7 percent to $34.54. The world’s largest cruise-ship operator forecast fourth-quarter results that trailed analysts’ estimates, citing a decline in advance bookings and higher fuel prices.
The S&P Supercomposite Homebuilding Index rose 2.3 percent, with all its 11 members gaining, as an industry report showed home prices in 20 U.S. cities increased in the 12 months through July by the most in more than seven years.
Lennar, the third-largest U.S. homebuilder by revenue, rose 4.3 percent to $36.01 after fiscal third-quarter earnings topped analysts’ estimates, driven by higher sales and home prices.
Facebook Inc. (Nasdaq: FB) climbed 2.7 percent to $48.45. Citigroup Inc.’s (NYSE: C) Mark May raised his recommendation on the social-network operator to “buy” from “neutral,” saying feedback from advertisers and agencies suggest that the growth seen in the second quarter is sustainable. May also boosted his price estimate by 72 percent to $55 a share.
— Bloomberg News contributed to this report.