Posted: Oct 8, 2013 10:16 AM by AP (PHOTO COURTESY: MGN ONLINE)
NEW YORK (AP) - Stocks made modest losses on Tuesday as investors awaited more developments from Washington to end the government shutdown and raise the nation's borrowing limit.
The impasse over the shutdown - sparked by House Republicans' insistence that a temporary funding bill contain concessions on President Barack Obama's health care law - shows no signs of breaking, as each side holds to its positions.
Lawmakers must also approve measures to raise the nation's borrowing limit by Oct. 17 or face the prospect of the U.S. defaulting on its debt. Treasury officials warned last week that the U.S. could plunge into recession if the debt ceiling wasn't raised. Democrats controlling the Senate are planning to try to pass a stand-alone measure to increase the borrowing cap.
"Unfortunately, we're just held hostage by what's going on in Washington," said Dan Veru, Chief Investment Officer of Palisade Capital Mangement. "The markets are somewhat directionless right now."
The Standard & Poor's 500 index fell its lowest level in a month on Monday as the shutdown dragged on and the deadline for lifting the borrowing limit moved closer.
The S&P 500 index dropped six points, or 0.4 percent, to 1,675 as of 10:53 a.m. Eastern Time. The Dow Jones industrial average fell 14 points, or 0.1 percent, to 14,921. The Nasdaq composite fell nine points, or 0.2 percent, to 3,760.
Companies will also start reporting earnings for the third quarter this week, giving investors something else to think about other than Washington. Aluminum producer Alcoa, which was recently removed from the Dow Jones industrials, is scheduled to report its earnings after the close of the market Tuesday. Banks JPMorgan and Wells Fargo are also among the companies releasing earnings this week.
In government bond trading, the yield on the 10-year Treasury note rose to 2.65 percent from 2.63 percent Monday.
The dollar fell against the euro and rose against the Japanese yen.
In commodities trading, the price of oil rose 75 cents, or 0.7 percent, to $103.79 a barrel. Gold fell $1.30, or 0.1 percent.
Among stocks making big moves:
- Jamba plunged $2.53, or 18.8 percent, to $10.94 in morning trading after the company cut its fiscal 2013 guidance, saying reduced spending by consumers hurt its sales in the third quarter.
- J.C. Penney rose 44 cents, or 5.8 percent, to $8.15, after the company reported encouraging sales trends for September. The struggling department store owner, which has faced concerns it is burning through cash, still anticipates having ample liquidity at year's end.