Stock prices fell for the fifth consecutive session Wednesday as little progress has been made in addressing the federal budget issues.
The Dow Jones Industrial Average fell 61.33 points to 15,273.26 and has dropped 2.5 percent in the last five sessions. The Nasdaq Composite Index was down 7.16 points to 3,761.10 and the Standard & Poor’s 500 Index lost 4.65 points to 1,692.77.
Investors will continue to watch the discussions in Washington regarding the debt ceiling and negotiations on the federal budget. Thursday will bring the final revision of the second-quarter GDP and a weekly update on unemployment claims.
Gold rose $19.90 to $1,336.20 an ounce, while oil fell 47 cents to $102.66 a barrel.
Wal-Mart (NYSE: WMT) lost 1.5 percent after the retailer told suppliers it’s cutting orders this quarter and next to address rising inventories. J.C. Penney Co. (NYSE: JCP) slumped 15 percent to $10.12 as Goldman Sachs Group Inc. (NYSE: GS) said the department-store chain’s liquidity will be strained.
Stryker Corp. (NYSE: SYK) slipped 2.9 percent on an agreement to buy Mako Surgical Corp. for $1.65 billion. Noble Corp. (NYSE: NE) added 1.8 percent to $38.60 after the offshore rig contractor said it plans to spin off about half its fleet.
About 5.9 billion shares changed hands on U.S. exchanges, in-line with the three-month average.
The Senate likely will not vote on a stopgap spending bill until this weekend, leaving the House just one full workday to act before spending authority for the federal government expires Oct. 1. The House and Senate are at odds over language that withdraws funding for the 2010 health care law.
On another fiscal front, Treasury Secretary Jacob J. Lew told Congress that the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt limit could lead to a downgrade of the U.S. government’s credit rating.
The wrangling comes as Americans are losing faith in the nation’s economic recovery, according to a Bloomberg National Poll. Some 44 percent of poll respondents say they expect the economy, which has expanded for nine consecutive quarters, to remain about the same over the next year; 28 percent see it weakening.
Investors have also been scrutinizing data to determine whether economic growth is robust enough for the Federal Reserve to begin paring back its $85 billion in monthly bond purchases.
The central bank’s decision Sept. 18 to refrain from slowing stimulus sent the S&P 500 to a record close of 1,725.52. The gauge has retreated every session since the decision, as policymakers send mixed signals on the timing of the central bank’s next move.
The S&P 500 has rallied 5.7 percent in the third quarter while Treasuries retreated 0.1 percent through yesterday, according to data compiled by Bloomberg and Bank of America Corp. (NYSE: BAC).
Wal-Mart lost 1.5 percent to $74.65, the steepest drop in the Dow. Last week, an ordering manager at the company’s Bentonville, Ark., headquarters described the pullback in orders in an e-mail to a supplier, who said others got similar messages.
Merchandise has been piling up because consumers have been spending less freely than Wal-Mart projected, and the company has forfeited some sales because it doesn’t have enough workers in stores to keep shelves adequately stocked.
Stryker fell 2.9 percent to $68.79. The second-largest seller of orthopedic devices agreed to buy Mako for $30 a share to add technology for robot-assisted surgeries. Mako surged 82 percent to $29.46.
JPMorgan Chase & Co. (NYSE: JPM) rallied 2.7 percent, the most in the Dow, to $51.70, snapping a two-day losing streak that pushed the stock down 4.7 percent.
The lender resumed settlement talks with the U.S. after authorities prepared to sue the bank yesterday in California federal court alleging it misrepresented the quality of mortgage-backed securities it sold from 2005 to 2007, a person familiar with the matter said.
A settlement may include $7 billion in cash and $4 billion for consumer relief, the Associated Press reported, citing an official familiar with ongoing negotiations among federal and state officials.
Facebook Inc. (Nasdaq: FB) rallied 2.1 percent to $49.46, the stock’s sixth gain in the past seven sessions, with each advance setting a fresh record. Canaccord Financial Inc. initiated coverage of the social media company with a “buy” rating.
— Bloomberg contributed to this report