Closing Bell: Stocks Sink Over Worries About Economy, Budget Battle

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new york stock exchange traders investing economy budget battle
John Moore/Getty Images
Stocks drifted lower Monday, weighed down by worries about the strength of the U.S. economy and the likelihood of a protracted partisan budget fight in Washington. The S&P 500 and the Dow industrials both recorded their third straight day of declines.

The Dow Jones industrial average (^DJI) surrendered 49 points, or 0.3 percent, to 15,401, the Standard & Poor's 500 index (^GPSC) lost 8 points, or 0.5 percent, to 1,701 and the Nasdaq composite index (^IXIC) dropped 9 points, or 0.2 percent, to 3,765.

Investors were also swayed by comments Monday by William Dudley, president of the Federal Reserve Bank of New York, who said that the timeline that Fed Chairman Ben Bernanke articulated in June for scaling back the central bank's stimulus measures is "still very much intact," as long as the economy keeps improving.

Investors were caught off guard last week when the Fed decided against reducing asset purchases from the current $85 billion a month pace, after many had anticipated a change in policy in September.

The S&P 500 had rallied 1.2 percent last Wednesday after the decision by the Fed. But the index ended Monday down for a third straight day.

Adding to concerns Monday was the approaching Oct. 1 deadline for Congress to avoid a government shutdown as lawmakers negotiate ahead of the end of the fiscal year on Sept. 30.

Financial stocks fell the most among the 10 industrial groups in the S&P 500 index. Investors sold on concerns that earnings would be hurt by lower trading volumes of bonds and foreign currencies at investment banks.

Citigroup (C) shares fell 3.2 percent to $49.57, a day after the Financial Times reported Citi had a significant drop in trading revenue during the third quarter which could hurt the bank's earnings. Goldman Sachs (GS), which became a Dow component on Monday, also fell. The stock slipped 2.6 percent to $165.29.

In commodities news, the price for a barrel of benchmark U.S. crude fell $1.16 to $103.59, while gold slipped $5.50 to $1,327.

More Stocks in the News:
  • Apple (AAPL) rose the most in the S&P 500 after shoppers snapped up 9 million of its newest iPhones following a rollout of the devices Friday. Apple surged 5.1 percent to $491.
  • Trading in the shares of troubled smartphone maker Blackberry (BBRY) were suspended after financial company Fairfax Financial Holdings offered to buy the smartphone maker in a deal valued at $4.7 billion. BlackBerry shares ended the day up 1 percent to $8.81.
  • Moody's restored General Motors' debt to investment grade status, eight years after the company lost the rating as it spiraled toward bankruptcy protection. The upgrade came shortly after GM announced plans to buy back high-interest preferred stock from a union retiree health care trust fund for $3.2 billion. GM (GM) shares rose 0.9 percent to $37.15.
  • US Airways and American Airlines are extending their merger deadline until at least Jan. 18 as the companies await the outcome of an antitrust lawsuit filed by the federal government. The trial is scheduled to begin Nov. 25. Shares of US Airways (LCC) fell 0.2 percent to $18.86.
  • Along with Goldman Sachs, Nike (NKE) and Visa (V) began trading on the 30-member Dow industrials on Monday, replacing Alcoa (AA), Bank of America (BAC) and Hewlett-Packard (HPQ)
What to Watch Tuesday:
  • Standard & Poor's releases the S&P/Case-Shiller index of home prices for July at 9 a.m. Eastern time.
  • The Conference Board releases the Consumer Confidence Index for September at 10 a.m.
  • The Senate Budget Committee holds hearings on the impact of political uncertainty on jobs and the economy.
These major companies are scheduled to report quarterly corporate earnings:
  • CarMax Group (KMX)
  • Carnival Corp. (CCL)
  • KB Home (KBH)
  • Lennar Corp. (LEN)
-Compiled from staff and wire reports.

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113 Comments

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renzixing

all english can not know

September 24 2013 at 5:10 AM Report abuse rate up rate down Reply
mac2jr

Give everyone $1,000,000 at birth and then see who can keep the most by the time he or she dies.

Sounds funny, but if you consider that most live to 80 or so, that most do earn a million, it is just that Corporate America has figured a way to steal most of it by the time you are 60... Which creates a slight retirement problem.

September 24 2013 at 2:27 AM Report abuse -4 rate up rate down Reply
2 replies to mac2jr's comment
comment814

most live to 80??? please, put down your drink bozo! maybe if you did some research, you would know that 1/3 never make it collect SS !!

September 24 2013 at 4:21 AM Report abuse +2 rate up rate down Reply
hugh_geenormous

Who is going to give it, and how will it be paid for?

September 24 2013 at 8:45 AM Report abuse rate up rate down Reply
mac2jr

Stocks are just like gasoline prices, there is always and excuse why..

September 24 2013 at 2:24 AM Report abuse -2 rate up rate down Reply
mac2jr

Economy good, stocks fall.

Economy bad, stocks fall.

War starts, stocks go up

War ends, stocks go down

gee...

September 24 2013 at 2:24 AM Report abuse -2 rate up rate down Reply
1 reply to mac2jr's comment
hugh_geenormous

Economy good, raise taxes

Economy bad, raise taxes

Increase spending, raise taxes

Economy bad, raise taxes

Pass a bill, raise taxes

Bil doesn't pass, raise taxes

Gee....

September 24 2013 at 8:31 AM Report abuse +1 rate up rate down Reply
tm00004

Hold your cash and wait. We are going to have another August 2011 by mid October. The well positioned Republican legislators will do a Put investment (bet against US success) when they know this will crash and after the DOW drops about 2,000 in late October the buy is on. Stocks will never be so cheap for decades and we can thank Congress for this artificial short lived boondoggle. Recall in 2011 had we bought in early September we would have made a 45% return in a half year.

The one thing we can count on is the stupidity of Congress. Don't freak out and sell but wait until the right time and then pounce. The entire world is on this same plan as Congress has no business messing with the world economy. Yet if they must we are ready. The only thing we all know with certainly is that history does repeat. Hold tight for a bumpy ride and laugh all the way to the bank. Those with more funds will make more but we all will make something. This is not bad news it is glorious. FYI I’m freaking out a bit too.

September 24 2013 at 12:34 AM Report abuse rate up rate down Reply
crazy ray

Sink? 49 points? My god are you people scum. Anything to make people read your crap. When are you going to start sacrificing babies on line?

September 23 2013 at 11:10 PM Report abuse +1 rate up rate down Reply
hugh_geenormous

Two government shutdowns in 1995, with the 2nd one going 21days into 1996. Workfare/welfare reform passed, in 1996, while Newt's GOP kept the house. Republicans gained teo seats in the senate, and we had a balanced budget within three years.

September 23 2013 at 10:54 PM Report abuse rate up rate down Reply
hugh_geenormous

Government shutdowns in1986 & 1987....George HW Bush is elected in 1988.

September 23 2013 at 10:45 PM Report abuse rate up rate down Reply
1 reply to hugh_geenormous's comment
mac2jr

Right into a war....

Then Bush Jr got in and we got in two wars.

Can't wait for Jenna or Barb to get in, we need three wars..

September 24 2013 at 2:14 AM Report abuse -2 rate up rate down Reply
4 replies to mac2jr's comment
hugh_geenormous

Government shut downs in 1981, 82 & 83.....Reagan carries 49 out of 50 (not 57) states in 1984

September 23 2013 at 10:39 PM Report abuse +2 rate up rate down Reply
2 replies to hugh_geenormous's comment
hugh_geenormous

My bad....two in 1983, and two in Oct. 1984.

September 23 2013 at 10:42 PM Report abuse rate up rate down Reply
mac2jr

Reagan raised taxes some 7 or 8 times, lied about the Berlin Wall, screwed Iran, destroyed the unions, and started the downfall of the U.S.A. economy. Good for America, right?

September 24 2013 at 2:15 AM Report abuse -1 rate up rate down Reply
1 reply to mac2jr's comment
hugh_geenormous

Bet you can't name the taxes that tip oneill raised during the Reagan administration, and are ignkring the fact that median income.went up under Reagan by as much as it has dropped under hugobama.
Reagan didn't destroy unions. He told the air traffic controllers that they weren't going to hold America's skies hostage.Man, you really do hate America don't you?

All.I'm pointing out is that historically government shut downs haven't worked out bad for Reoublicans

September 24 2013 at 7:27 AM Report abuse rate up rate down
hugh_geenormous

Government shut downs in 1976, 77, 78 & 79.....Ronald Reagan wins in a landslide in 1980.

September 23 2013 at 10:36 PM Report abuse rate up rate down Reply