The Dow Jones industrial average (^DJI) dipped 66 points, or 0.4 percent, to 15,334, the Standard & Poor's 500 index (^GPSC) lost 4 points, or 0.2 percent, to 1,697 and the Nasdaq composite index (^IXIC) nudged up 2 points to 3,768.
Volatility was in the air, although the refusal of Senate Republican leaders to get behind a tea party backed House bill to fund the government while defunding Obamacare reduced the odds of a government shutdown. But it clearly didn't eliminate the possibility: Signs still point to a frantic last-minute showdown among conservatives who want to cancel funding for the Affordable Care Act and those Republicans who fear voter anger should they shut down the government. However, many on Wall Street expect any shutdown to be short and not affect markets deeply.
In corporate news, shareholders of Smithfield Foods (SFD) approved a plan to sell the company to Shuanghui International Holdings for $34 a share, or $4.72 billion in cash. The deal, expected to close Thursday, will be the largest takeover of a U.S. company by a Chinese firm, valued at about $7.1 billion including debt.
Chrysler Group is reluctantly preparing for an initial public offering of some of its shares. The automaker is proceeding with the IPO after it failed to reach an agreement on the value of the stock with the retiree trust, known as VEBA, that owns it.
In commodities news, the price for a barrel of benchmark U.S. crude fell 46 cents to $103.13, while gold slipped $4.50 to $1,322.50.
More Stocks in the News:
- Facebook (FB) shares jumped 2.7 percent to $48.44 after the South China Morning Post reported the online social media giant and other websites deemed sensitive and blocked by the Chinese government will be accessible in a planned free-trade zone in Shanghai.
- Lennar (LEN) shares led discretionary stocks higher with a 1.5 percent rise to $36.05 after the No. 3 U.S. homebuilder reported a better-than-expected quarterly profit.
- Shares of Applied Materials (AMAT) jumped 9.1 percent to $17.45 after the chipmaker and Tokyo Electron said they will merge in an all-stock deal, creating a $29 billion company.
- Red Hat (RHT), the world's largest commercial distributor of the Linux operating system, reported late on Monday a slower growth in billings than analysts had expected. Its shares shed 11.6 percent to $46.77.
- Carnival (CCL), the cruise ship operator, fell 7.8 percent to $34.50 after the company said that it expects revenue to drop more than its prior forecast.
- The Commerce Department reports durable goods orders for August at 8:30 a.m. Eastern time and August new home sales at 10 a.m.