
U.S. stocks
dipped slightly on Tuesday despite signs of slight progress to resolve
the fiscal standoff in Washington, although no agreement appeared to be
likely soon.
With the partial U.S.
government shutdown in its second week and only nine days left for
Congress to raise the U.S. debt ceiling, President
Barack Obama said he would accept a short-term increase to avoid a default.
A
Senate aide said Republican Senator Rob Portman, who is influential on
budget matters, floated a plan to cut federal spending and reform the
U.S. tax code as part of a broader deal to reopen shuttered government
agencies and raise the debt ceiling.
"In this type of environment, pre-
earnings
season where it is headline driven by a market bludgeoned with
continued sound bites about the shutdown, it's not a surprise to see
markets make these smaller moves," said Sal Arnuk, co-manager of trading
at Themis Trading in Chatham, New Jersey.
"What
is really at stake is a tug-of-war going on because investors don't
know if they want to avoid getting caught up in a crisis-driven selloff
versus missing a resolution rally."
The
shutdown has led to few economic data releases, leaving investors to
focus on the earnings-reporting season. However, earnings are more
likely to affect individual companies than drive market-wide moves.
After Tuesday's market close, former
Dow component Alcoa Inc (
AA.N) will report earnings as will KFC parent company Yum! Brands Inc (
YUM.N).
The
longer the government shutdown continues, the greater the damage to the
economy, according to analysts, increasing the probability the Federal
Reserve will leave its stimulus measures in place.
The Dow Jones industrial average
.DJI fell 39.96 points or 0.27 percent, to 14,896.28, the S&P 500
.SPX lost 3.68 points or 0.22 percent, to 1,672.44 and the Nasdaq Composite
.IXIC dropped 7.077 points or 0.19 percent, to 3,763.3.
McKesson (
MCK.N)
shares rose 5.7 percent to $136.99 as the best performer on the S&P
500 after Dow Jones Newswires reported the company was in advanced
talks to take over Celesio (
CLSGn.DE) in a possible 3.74 billion euro ($5.08 billion) deal.
PHH Corp (
PHH.N)
is exploring splitting up its mortgage and auto fleet leasing
businesses and selling each of the units, three people familiar with the
situation told Reuters on Monday. Its shares fell 2.5 percent to
$25.26.
J.C. Penney Co Inc (
JCP.N)
rose 2.5 percent to $7.90 after the struggling retailer reported a
smaller decline in same-store sales for September compared with August
and said it was seeing positive signs in many areas of its business.
U.S.-listed shares of Talisman Energy Inc (
TLM.N)
advanced 2 percent to $13 after activist investor Carl Icahn said he
had purchased about 61 million shares of the underperforming Canadian
oil producer and may seek a seat on the company's board.