US stocks decline on lingering budget vote
US stocks fell for the fifth straight session as market participants weigh the ongoing debt ceiling debate that threatens to shutdown the federal government in October.
Treasury Secretary Jacob Lew said the government will have exhausted its borrowing authority by October 17 should Republicans and Democrats fail to reach a resolution on how to fund the government, leaving the United States with less than $50 billion in cash to pay its bills. President Barack Obama has said he is unwilling to negotiate with congressional Republicans on increasing the nation’s borrowing authority. Obama is demanding an increase to the debt ceiling, currently marked at $16.7 trillion, while Republicans are demanding that an increase in the debt ceiling must result in equal spending cuts.
Meanwhile, the debate concerning Federal Reserve monetary policy continues to pull market participants in opposite directions, as investors speculate whether last week’s decision was a temporary stall to the Fed’s taper plan.
The stock market’s current losing streak is the worst since December 28, when policymakers locked horns on the fiscal cliff debate. The Standard and Poor’s 500 fell 0.4 percent to 1,692.77. The Dow Jones Industrial Average was down more than 61 points to 15,273.26, with 23 of its 30 members reporting losses. The index’s top gainer was JP Morgan Chase and Co (NYSE:JPM) , which rallied more than 2.7 percent after declining for three straight sessions.
Wal-Mart (NYSE:WMT) Stores was the Dow’s top loser, falling more than 1.4 percent after the retail giant announced it would cut orders this quarter and the next to account for growing inventories. Consumer staples were also down, led by Johnson & Johnson and Proctor & Gamble (NYSE:PG) , which declined at least 1.1 percent.
The NASDAQ Composite fell almost 0.2 percent to 3,761.10. Shares of Apple, Inc (NASDAQ:AAPL) declined 1.55 percent after posting a strong rally on the heels of its best iPhone launch yet.
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