US stocks decline after 4-day rally
Stocks on the American exchange snapped a four-day rally after optimism waned that lawmakers can resolve the budget impasse that has gripped the global markets for more than two weeks. The US government is on the brink of an unprecedented default should Senate leaders fail to resolve their differences ahead of the October 17 deadline.
Senate leaders put talks on hold after two days of progress, with Majority Leader Harry Reid and Minority Leader Mitch McConnell edging closer to an agreement. Although talks continue, “The market’s knee-jerk reaction will be to sell on any kind of bad news,” according to Stifel Nicolaus & Co. market strategist Kevin Caron. Talks have shifted to the House of Representatives, which will consider its competing plan for ending the impasse. House Speaker John Boehner is working on a plan that contains policy conditions Democrats have already rejected.
The office of Majority Leader Harry Reid expects the House plan to fail, according to an official spokesman, which will put the spotlight back on the Senate deal. “No balanced, partisan, reasonable, outcome in the Senate is safe from the House Republicans,” according to Democratic Senator Chris Coons.
The Standard & Poor’s 500 fell more than 0.7 percent to 1,698.06, with all ten of its major industries declining. The benchmark index was dragged down by Teradata Corp (NYSE:TDC) , which declined more than 18 percent after a weak earnings report. The Dow Jones Industrial Average dropped 133 points to 15,168.00 after all but two of its members registered declines. The Dow was pulled asunder by Proctor and Gamble Co (NYSE:PG) and The Home Depot (NYSE:HD) , which fell at least 1.45 percent. The NASDAQ Composite declined more than half a percent to 3,794.01 after a lukewarm day for technology stocks.
The markets will remain in volatility mode until Congress can reach an accord before the October 17 deadline. A failure to reach an agreement before Thursday would make the United States the first major Western government to default in 80 years.
Sorry. No data so far.