US stocks move lower as debt talks fall through11:26 am | October 14, 2013
NEW YORK (AP) — Stocks are lower on Wall Street Monday after a breakdown in budget talks brought the nation closer to a potentially disastrous default on its debt.
The Dow Jones industrial average was down 72 points, or 0.5 percent, at 15,166 as of 10:45 a.m. Eastern. The Standard & Poor’s 500 index was down eight points, or 0.5 percent, at 1,695. The Nasdaq composite fell 13 points, or 0.4 percent, to 3,779.
The United States will reach the limit of its borrowing authority on Thursday, according to estimates from the Treasury Department. If the debt ceiling is not raised, investors fear the U.S. could default on its borrowings in the coming weeks.
Stocks rose sharply late last week on news that progress had been made in talks between House Republicans and the White House. However, negotiations broke down over the weekend and remain at an impasse. It is looking increasingly unlikely that a deal will be made in the next three days.
Investors continue to express hope that a deal can be reached before the debt ceiling could cause any lasting damage. In the last few years, major political deals have gone on until the very last minute.
“We don’t need some well-crafted, detailed deal,” said Quincy Krosby, market strategist with Prudential Financial. “We just need to buy some time so they can keep negotiating.”
The U.S. government remains partially shut down because House Republicans want to attach conditions to a budget bill that would scale back the country’s new health care law. President Barack Obama is insisting that the government be reopened without strings attached. The partial shutdown is entering its third week.
Investors also have a busy week of corporate earnings to work through. Coca-Cola, Johnson & Johnson and Citigroup report their results Tuesday.
Bond trading is closed in observance of Columbus Day.
Among stocks making big moves:
— Netflix rose $14.09, or 5 percent, to $314.94 after The Wall Street Journal reported that the video streaming service is in talks to offer its services to cable companies.
— Merck & Co. fell 79 cents, or 2 percent, to $46.49 after another analyst lowered his rating on the drug developer, which recently announced job cuts and is dealing with the expiration of patents protecting key products.