Closing Bell: Stocks Tumble as Talks on Shutdown, Debt Ceiling Stall

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Wall Street Budget Battle (Specialist Frank Masiello watches a television monitor on the floor of the New York Stock Exchange sh
Richard Drew/AP
Stocks fell Tuesday after Senate leaders from both parties suspended negotiations to end the government shutdown and avert a looming default on the nation's debt, overshadowing some key corporate earnings.

The Dow Jones industrial average (^DJI) slipped 133 points, or 0.9 percent, to close at 15,168, the Standard & Poor's 500 index (^GPSC) lost 12 points, or 0.7 percent, to 1,698, and the Nasdaq composite index (^IXIC) gave up 21 points, or 0.6 percent, to 3,794.

The Senate suspended negotiations until House Republicans work out their own plan to proceed on debt limit and government funding. The move comes as the U.S. government pushes closer to its borrowing limit on Oct. 17. Lawmakers have until Thursday to agree to raise the $16.7 trillion U.S. borrowing limit, or the country will commit an unprecedented debt default. Stocks dropped to lows of the day Tuesday on the news.

Markets have largely avoided steep losses due to optimism that lawmakers would agree -- eventually -- to end the partial government shutdown and raise the debt ceiling before time expires. At the same time, volatility in the markets has spiked as the deadline approaches with little obvious progress seen. The market was whipsawed Tuesday as the on-again, off-again talks in Washington left investors wondering whether the U.S. could avoid defaulting.

In economic news, data showed the pace of growth in New York state's manufacturing sector slipped this month to its slowest since May, but business optimism stayed strong.

In commodities trading, benchmark crude for November delivery fell $1.20 to close at $101.21, while gold, which is generally viewed as a safe haven in times of turmoil, nonetheless fell $3.40 to $1,273.

In corporate news, Lockheed Martin (LMT) said it plans to move production of its joint light tactical vehicle to an assembly line at its Camden, Ark., manufacturing plant, a move it says will help make the vehicle more affordable for the U.S. Army and Marine Corps.
Prototypes of the vehicles were made at BAE Systems' Sealy, Texas, plant, but BAE plans to close that facility. Lockheed Martin stock fell $1.59 to $125.91 in trading Tuesday.

In earnings news, Citigroup (C) closed 74 cents lower at $48.86, after a wobbly day of ups and downs. The banking giant reported its earnings fell slightly in the third quarter, after a $1 billion drop in revenue from its bond trading business and a slump in mortgage refinancing. Revenue fell to $18.2 billion compared with $19.2 billion a year ago, while earnings amount to $1.02 a share, down from $1.06 a share in the year-ago period.

More Stocks in the News:
  • Shares of J.C. Penney (JCP) slipped 71 cents to $7.16 on rumors that the struggling retailer had hired bankruptcy counsel. Company spokeswoman Kristin Kays said there was "no truth to the rumor," origins of which were unclear.
  • Fedex (FDX) shares ticked up 4.1 percent to $120.08 after the world's No. 2 package- shipper said it has authorized a share repurchase program of up to 32 million of its outstanding shares of common stock.
  • Teradata (TDC) fell 18.4 percent to $42.92, a day after the data analytics firm cut its full-year earnings forecast by about 10 percent.
  • Johnson & Johnson (JNJ) reported stronger-than-expected quarterly results on strong growth for its prescription drugs. The stock rose 0.1 percent to $89.93.
  • Coca-Cola (KO) reported higher earnings and lower revenue, helped by strong global sales of its Coca-Cola brand products. But the stock fell 0.6 percent to $37.69.
  • Invesco (IVZ) slipped 6.4 percent to $32.42 after the investment management company announced Neil Woodford, the head of U.K. equities for Invesco Perpetual, will be leaving the company in April. Woodford said in a statement that after he leaves Invesco, he plans on creating a new fund management business serving institutional and retail clients.
  • DexCom (DXCM) rose 1.5 percent to $29.47 after an analyst started covering the medical device company with a "Buy" rating, forecasting strong sales of its newest blood-sugar monitoring system.
What to Watch Wednesday:
  • The National Association of Home Builders releases housing market index for October at 10 a.m. Eastern time
  • The Federal Reserve releases its Beige Book survey of regional economic conditions at 2 p.m.
These major companies are scheduled to report quarterly financial results:
  • Abbott Laboratories (ABT)
  • American Express (AXP)
  • Bank of America (BAC)
  • EBay (EBAY)
  • IBM (IBM)
  • KeyCorp (KEY)
  • Mattel (MAT)
  • PepsiCo (PEP)
  • U.S. Bancorp (USB)
-Compiled from staff and wire reports.

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32 Comments

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k4jlp

Gee, just think, the T Party folks think their stocks tanking is the worst that will happen...remember, they live in their OWN LITTLE WORLD".

October 16 2013 at 6:24 AM Report abuse rate up rate down Reply
lisa.zhong

political is big man's game

www.zhiyaochem.com

October 16 2013 at 5:14 AM Report abuse rate up rate down Reply
rwchipps

Since the politicians are costing everyone else money, here is an idea for a little payback, instead of donating to any of these jerks campaign funds donate to a local charity. If we take the money out of politics then maybe we will have free and fair elections and go back to having public servants instead of non caring a**holes in power. They need to go back to working for us we the people. I don't care if it is democrats or republicans they are equally at fault.

October 16 2013 at 1:32 AM Report abuse rate up rate down Reply
1 reply to rwchipps's comment
casemarinecal

Agree we must defund these guys somehow.. groups like Heritage must donate a awful lot of money for them not to listen to We The People!

October 16 2013 at 6:51 AM Report abuse rate up rate down Reply
jcduyal

Harry Reid - the man who really runs America. To the ground.

October 15 2013 at 11:30 PM Report abuse -2 rate up rate down Reply
pdbliz

I SEE ALOT OF BUTT HOLES ON HERE TONIGHT...
NEGITIVE THINKING PEOPLE,,

October 15 2013 at 11:08 PM Report abuse -2 rate up rate down Reply
chris1011

Delaying the individual mandate sounds good, but the policies are priced on the assumption that it is there. Removing it will cause the healthier individuals to skip buying insurance and cost the insurance carriers a fortune since they still need to cover pre-existing conditions at the same premium rates as everyone else. This would ensure that the marketplace would not function, and do so in the most chaotic and destructive way possible.
Eliminating the healthcare benefits to congressional and executive employees is effectively a significant pay cut. Many of the most experienced staffers would likely take early retirement instead before losing access to retiree health care benefits as part of this change. Others would likely seek private employment instead of accepting such a wage cut. It seems extremely unfair to inflict this on staffers for the political theater it represents.

Better idea, the House should pass the Clean C.R. NOW, then pass a clean bill repealing the debt ceiling.

October 15 2013 at 10:54 PM Report abuse +4 rate up rate down Reply
pdbliz

IT IS ALL ABOUT ,,HOW YOU PLAY THE GAME......
THE DEMOCRATES ,,HIT BELOW THE BELT,,,,,
HATE CHRISTIANS....
NEVER SEE GOOD IN ANYTHING...
HATE KIDS,,,THAT WHY THEY SUPPORT ,,,KILLING OF UNBORN BABYS....
TAKING THIS COUNTRY TO ,,,SOCIALISUM FORM......

October 15 2013 at 9:28 PM Report abuse -10 rate up rate down Reply
2 replies to pdbliz's comment
chris1011

Call Roto-Rooter already, please. There is a clog in the pipes caused be excessive TP that needs to be ground up and flushed into the sewer main.

October 15 2013 at 10:56 PM Report abuse +2 rate up rate down Reply
pdbliz

thanks for negitives,,,I SEE I TOLD THE TRUTH AND YOU CAN NOT STAND IT..

October 15 2013 at 11:06 PM Report abuse -2 rate up rate down Reply
teapotparty11

NEVER SURRENDER JOHNNY BOY, NEVER. TEA PARTY HAS YOUR BACK AS LONG AS YOU ARE LOYAL TO US. NOW GO OUT AND WIN ONE FOR THE GIPPER JOHNNY BOY, YOU CAN DO IT!

October 15 2013 at 9:22 PM Report abuse -7 rate up rate down Reply
teapotparty11

DAY 15 AND WE ARE STILL WINNING!!!! HANG TOUGH JOHNNY BOY, NEVER GIVE IN EVEN IF IT MEANS TAKING ANOTHER CREDIT RATING HIT LIKE LAST TIME. THE RALLY ON SUNDAY AT THE WAR MEMORIAL WAS SPECTACULAR WITH TEDDY AND SARAH PROTESTING TO PROTEST WHAT THEY SHUT DOWN, WHAT GENIUS! ONLY A FEW MORE HOURS TO HOLD OUT UNTIL THAT MAGICAL MOMENT OF DEFAULT. DON'T PAY ATTENTION TO THE POLLS, THEY ARE ALL WRONG, JUST LIKE THEY WERE ON ELECTION NIGHT, WE KNOW IN OUR HEARTS THAT 75% OF AMERICANS APPROVE, NOT DISAPPROVE OF WHAT WE ARE TRYING TO ACCOMPLISH.

October 15 2013 at 9:15 PM Report abuse -8 rate up rate down Reply
pdbliz

WHY DO THE DEMOCRATES,,,HATE ,,,The so called TEA PARTY,,,those are just a few Republicans,,,and,,,they the Democrates,,,,go crazy when RUSH,,,,a talk shot host speaks.....
DEMOCRATES,,,WHAT IN THE WORLD ARE YOU SO SCARED OF,,,,,,, COULD IT BE....FREE SPEACH.???

October 15 2013 at 8:58 PM Report abuse -9 rate up rate down Reply