Posted: Thursday, October 3rd 2013 at 1:11pm
Stock market reaches lowest level in a month
By The Associated Press
NEW YORK (AP) -- The stock market sank to its lowest level in nearly a month Thursday as a partial U.S. government shutdown dragged into a third day.
President Barack Obama and Congressional leaders spoke late Wednesday but the meeting appeared only to harden their stances.
In speech in Rockville, Md. Obama said Thursday there was only one way out of the shutdown: "Congress has to pass a budget that funds our government with no partisan strings attached." (See separate story.)
Republicans in the House of Representatives, pushed by a core of tea party conservatives, are insisting that Obama accept changes to the health care law he pushed through three years ago as part of a budget bill. Obama refuses to consider any deal linking the health care law to routine legislation needed to extend government funding.
The Standard & Poor's 500 index dropped 19 points, or 1.2 percent, to 1,674 as of 12:31 p.m. Eastern Daylight Time, its lowest point since Sept. 9.
The Dow Jones industrial average fell 158 points, or 1 percent, to 14,975. The Nasdaq composite fell 51 points, or 1.3 percent, to 3,764.
The declines were broad. Six stocks fell for every one that rose on the New York Stock Exchange.
Industrial stocks fell more than the broader market. Boeing lost the most of the 30 stocks in the Dow, giving up $2.76, or 2.3 percent, to $115.05.
The recent declines in the stock market related to the budget impasse have been moderate, suggesting that while investors have yet to hit the panic button they are getting gradually more nervous as the stalemate drags on.
Stocks have been edging lower during the last two weeks after climbing to record highs last month. If the Standard & Poor's 500 index ends Thursday down, it will have fallen for nine of the past eleven days. Even after its recent stumble, the S&P 500 is still up 17 percent so far this year.
"Investors have to look beyond all of this dysfunction in Washington to see what is a reasonably positive investment landscape beyond it," said Cam Albright, director of asset allocation for Wilmington Trust Investment Advisors. "Ultimately, you are going to have a resolution to it, but it's going to get a lot more difficult and a lot trickier before it gets any easier."
A four-year bull-market for stocks has been sustained by a recovery in the housing market, improving hiring and resilient corporate earnings. Unprecedented economic stimulus from the Federal Reserve has also supported the stock market.
The dollar dropped against the euro and the Japanese yen, continuing a recent slide. The dollar index, which measures the U.S. currency against a group of other major currencies, has declined for five days.
Investors were also disappointed Thursday by a survey that showed growth in service industries slowed in September.
Growth at U.S. service companies slowed in September from an eight-year high in August as sales fell sharply, new orders dipped and hiring weakened, according to The Institute of Supply Management.
In government bond trading, the yield on the 10-year Treasury note fell to 2.61 percent from 2.62 percent Wednesday.
In commodities trading the price of oil fell 48 cents, or 0.5 percent, to $103.63 a barrel. Gold fell $3, or 0.2 percent, to $1,317 an ounce.
Among stocks making big moves:
- HCP fell $1.84, or 4.4 percent, to $39.93 after the real estate investment trust fired James F. Flaherty as the company's chairman and CEO.
- CalAmp, a wireless technology company, surged $2.20, or 11.8 percent, to $20.89, after the company's third-quarter outlook came in better than Wall Street analysts had been expecting.
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