Get breaking news alerts via email

Click here to manage your alerts
FILE - In this Sept. 18, 2013 file photo, Trader F. Hill Creekmore works on the floor of the New York Stock Exchange. Global stock markets fell Friday Sept. 20, 2013, two days after the Fed announced it would keep its unprecedented stimulus in place. Public holidays kept trading muted in Asia. (AP Photo/Richard Drew, File)
Stocks fall as investors fret over budget fight
First Published Sep 20 2013 02:43 pm • Last Updated Sep 20 2013 02:43 pm

Washington’s money fight jolted investors on Friday, reminding them that the next few weeks are likely to bring a lot of uncertainty. Wall Street hates uncertainty.

Stocks fell. Major indexes were mixed in morning trading, but turned lower around midday after the U.S. House of Representatives voted to defund President Barack Obama’s health care law.

Join the Discussion
Post a Comment

The vote itself wasn’t a surprise, but it reminded investors that the Republican-led House and the Democratic-controlled Senate are poised for a showdown over federal spending.

The debt ceiling must be raised by Oct. 1 to avoid a government shutdown, and a potential default on payments, including debt, later in the month.

"What we’ve done is basically committed ourselves to two weeks of worry," said Sam Stovall, chief equity strategist at S&P Capital IQ.

Until now, September defied the worriers. The stock market has bounced backed from an August swoon, despite a calendar loaded with potential rally killers.

Fears of a conflict with Syria have faded and Wall Street cheered when Larry Summers withdrew his name as a candidate to replace Federal Reserve chairman Ben Bernanke.

Summers, a former Treasury secretary, was viewed as being more likely to rein in the Fed’s massive stimulus program, which has kept interest rates low and boosted corporate profits.

The Standard & Poor’s 500 index is up 5 percent this month. If that holds, it would be the index’s best monthly performance since January. Even with Friday’s declines, stocks are near all-time highs set earlier this week.

As Middle East strife recedes from investors’ minds, though, fears of budget gridlock grow.

story continues below
story continues below

"Geopolitics ... is much lower on the list. It’s not off the list" of investor worries, said David Darst, chief investment strategist for Morgan Stanley Wealth Management. "No. 1 becomes the debt ceiling and the federal spending debate."

In afternoon trading, the Dow Jones industrial average was down 122 points, or 0.8 percent, to 15,514. The S&P 500 index fell 10 points, or 0.6 percent, to 1,712. The Nasdaq composite fell seven points, or 0.2 percent, to 3,781.

Health care was the only industry to rise among the 10 groups in the S&P 500. Industrial companies and tech stocks saw the biggest declines.

Darden, the struggling parent of Olive Garden and Red Lobster, fell $3.13, or 6 percent, to $46.17 after posting a much lower quarterly profit and saying its president and chief operating officer will retire. Sales fell at its two flagship restaurant chains despite efforts to renew menus and advertising.

Goodyear Tire & Rubber rose 23 cents, or 1 percent, to $22.46 as it reinstated a dividend after a hiatus of more than a decade. It also said it would buy back up to $100 million of its shares.

Two new stocks doubled after their initial public offerings.

Tech security company FireEye jumped 90 percent to $38.20 in its debut, and artificial intelligence company Rocket Fuel rose 91 percent to $55.43. Both had more than doubled in morning trading.

Country club manager ClubCorp rose 71 cents, or 5 percent, to $14.71 on its first day of trading.

Most overseas markets moved slightly lower, with small declines in the German DAX ahead of Sunday’s election.

The price of oil fell 51 cents to $105.35 a barrel.

The dollar was flat at 1.35 euros and weakened slightly to 99.34 Japanese yen.

The yield on the 10-year Treasury note fell to 2.72 percent, from 2.76 percent on Thursday.

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment

About Reader Comments

Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.