NEW YORK - U.S. stocks fell, after the first back-to-back weekly decline since August for the Standard & Poor’s 500 Index, as lawmakers remained deadlocked over extending the nation’s debt limit to avoid a default.
Bank of America Corp. and Wells Fargo & Co. paced declines among banks, each slipping 1.1 percent. Alcoa Inc., which is scheduled to release third-quarter results tomorrow, lost 1.2 percent. International Business Machines Corp. dropped 1 percent as Barclays Plc advised investors to pare holdings.
The S&P 500 fell 0.7 percent to 1,678.70 at 10:05 a.m. in New York. The Dow Jones Industrial Average declined 121.18 points, or 0.8 percent, to 14,951.40. Trading in S&P 500 stocks was 13 percent below the 30-day average during this time of day.
“Every day that passes makes it potential for a policy mistake to be that much greater,” Darren Bagwell, director of research at Thrivent Asset Management in Minneapolis, said in a phone interview. His firm oversees about $82 billion. “One of the ironies of the market holding in as well as it has is that it has not exerted the type of pressure on Washington like we got a couple years ago.”
Speaker John Boehner said yesterday in an interview on ABC’s “This Week” that the House of Representatives can’t pass a debt-ceiling increase without packaging it with other provisions. Boehner said the country could default if President Barack Obama doesn’t negotiate. The Obama administration has said it won’t negotiate over funding the government or raising the debt ceiling, arguing that it is part of the basic functions of Congress and shouldn’t be used as points of leverage.
Without an increase to the debt limit, the U.S. will exhaust its borrowing authority on Oct. 17 and would run out of funds to pay all of its bills sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office. The House and Senate weren’t in session yesterday and there were no meetings planned between the two sides.