US stocks open lower as debt talks fall through
New York • Stocks are lower on Wall Street in early trading Monday after a breakdown in budget talks brought the nation closer to a potentially disastrous default on its debt.
The Dow Jones industrial average was down 70 points, or 0.5 percent, at 15,166 after the first half-hour of trading Monday. The Standard & Poor's 500 index was down eight points, or 0.5 percent, at 1,695. The Nasdaq composite fell 14 points, or 0.4 percent, to 3,778.
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. However, negotiations broke down over the weekend and remain at an impasse. It is looking increasingly unlikely that a deal will be made in the next three days.
Separately, 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.
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:
Merck & Co. fell 65 cents, or 1 percent, to $46.66 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.
Coach fell 73 cents, or 1 percent, to $53.87 after a Canaccord Genuity analyst lowered her rating and price target on the stock, saying slowing traffic and tough competition from Michael Kors could weigh on the handbag and accessories company.