Stocks edge lower on government shutdown fears11:23 am | September 24, 2013
NEW YORK (AP) — Ongoing concerns about the possibility of a government shutdown held back the stock market back on Tuesday.
The Dow Jones industrial average and the Standard & Poor’s 500 index dipped in early trading. If they end lower, it would be their fourth straight day of declines after hitting all-time highs Sept. 18.
The U.S. House of Representatives voted to defund President Barack Obama’s health care law on Friday, reminding Wall Street that the Republican-led House and the Democratic-controlled Senate are poised for a showdown over spending. The debt ceiling must be raised by Oct. 1 to avoid a government shutdown, and a potential default on payments, including debt, later in the month.
“A government shutdown starting next week is looking increasingly likely,” said Jim Russell, a regional investment director at U.S. Bank. “That will not be welcomed by the capital markets.”
The Dow fell 56 points, or 0.4 percent, to 15,345 as of 10:18 a.m. The S&P 500 index fell six points, or 0.4 percent, to 1,695. The Nasdaq composite dropped 10 points, or 0.2 percent, to 3,754.
A report Tuesday showed that Americans’ confidence in the economy is down slightly in September, as many are less optimistic about hiring and pay increases.
The Conference Board, a New York-based private research group, said that its consumer confidence index dropped to 79.7 in September, down from August’s 81.8.
Consumers’ confidence is closely watched because their spending accounts for 70 percent of U.S. economic activity. Confidence has grown since the Great Recession, but it hasn’t hit a reading of 90, which typically accompanies a healthy economy.
Before the market opened, a report showed that home prices rose the most since February 2006. A revival in housing has been one of the bright spots for the economy.
The Standard &Poor’s/Case-Shiller 20-city home price index reported Tuesday that U.S. home prices rose 12.4 percent in July compared with a year earlier. An increase in sales on a limited supply of available homes drove the gains.
The yield on the 10-year Treasury note rose fell to 2.69 percent from 2.70 percent late Monday.
In commodities trading, the price of oil fell to a six-week low, as fears of a U.S.-led military attack on Syria faded. Oil was down 64 cents, or 0.6 percent, to $103 a barrel. Gold fell $16.90, or 1.3 percent, to $1,310.50 an ounce.
Among stocks making big moves:
— Red Hat, a software company, fell $5.22, or 9.9 percent, to $47.75, after the company said that billings for the quarter were lower than expected and it issued disappointing revenue predictions for the current quarter and full year.
— Applied Materials, a chip-making equipment manufacturer, rose $1.36, or 8.5 percent, to $17.37, after it agreed to acquire rival Tokyo Electron Ltd.
— Facebook rose $1.60, or 3.4 percent, to $48.78 after Citigroup upgraded the company’s stock to a “buy” recommendation from “neutral,” saying that it expects the company to continue to grow, helped by increasing advertising revenue contributions from its mobile website.