US stocks move lower as debt talks fall through
NEW YORK (AP) — Stocks were mostly lower Monday as investors waited for news of a possible deal to raise the debt ceiling before Thursday's deadline.
Stocks started sharply lower after negotiations between the White House and Congressional Republicans broke down over the weekend. The market recovered much of its early loss on news that President Barack Obama will meet with Congressional leaders in both parties later Monday to keep negotiations going over raising the debt ceiling.
The Dow Jones industrial average was down 28 points, or 0.2 percent, at 15,208 as of 12:15 p.m. Eastern. The index fell as much as 100 points in early trading.
The Standard & Poor's 500 index was down three points, or 0.2 percent, at 1,699. The Nasdaq composite inched up a point to 3,792.
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. President Obama will meet with congressional leaders at the White House at 3 p.m. Eastern.
Investors continue to express hope that a deal can be reached before the debt crisis causes any lasting damage. In the last few years, political deals over major budget disputes 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.
In one sign of investor worry, gold prices were up $12.50 an ounce, or 1 percent, to $1,280.80 an ounce.
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 $16.15, or 5 percent, to $317.00 after The Wall Street Journal reported that the video streaming service is in talks to offer its services to cable companies.
— Merck & Co. fell 68 cents, or 1 percent, to $46.61 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.