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Overnight Markets: US stocks fall as debt impasse continues
by Himanshu Singh on Oct 16, 2013 at 05:34
Wall Street declined on Tuesday as lawmakers failed to reach an agreement to extend the government’s borrowing limit less than two days before the deadline.
The Dow Jones industrial average ended down 133 points, or 0.87%, at 15,168. The Standard & Poor's 500 Index was down 12 points, or 0.71%, at 1,698. The Nasdaq Composite Index was down 21 points, or 0.56%, at 3,794.
Traders shunned big bets given the political uncertainty, which overshadowed some key corporate earnings. Senator Richard Durbin said Senate negotiations had been suspended until House Speaker John Boehner can work out a fiscal plan that can proceed in the House of Representatives.
Lawmakers have until 17 October to agree to extend the $16.7 trillion US borrowing limit or the country will risk an unprecedented debt default.
After the market closed, Fitch Ratings placed the US’ 'AAA' rating on rating watch negative, citing the debt ceiling gridlock.
Among other assets, crude oil fell 1.5%, while gold, which is viewed as a safe haven, rose 0.7%.
In corporate news, Citigroup Inc (C.N) reported weaker-than-expected results as the bank was hit by a double-digit drop in bond trading revenue for the quarter, sending its shares down 1.5%.
Johnson & Johnson (JNJ.N) reported stronger-than-expected quarterly results on strong growth for its prescription drugs, while Coca-Cola Co (KO.N) reported revenue slightly under expectations. J&J rose 0.1% while Coca-Cola fell 0.7%.
Intel Corp (INTC.O) shares reversed early gains and fell 0.9% after the market closed after it reported revenue that topped expectations.
FedEx (FDX.N), the world's No. 2 package carrier, authorised a share repurchase programme of up to 32 million of its outstanding shares of common stock, sending its shares up 4.1%.
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