Dow Jones: 12,501.30 (–91.50) S&P 500: 1,331.94 (–5.49) Nasdaq: 2,839.96 (–2.84)THE STALEMATE in US debt talks dragged down stocks for a second day yesterday and light volume showed investors remained reluctant to make bets despite another round of healthy earnings.
A failure to raise the US debt limit by an August 2nd deadline could roil markets and hurt the economy if the US puts off paying bills.
Democrats and Republicans continued to joust yesterday over which side’s plan has the better chance of passage.
“Investors believe that there’s going to be a resolution at the 11th hour, but many of those investors are starting to get cold feet,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.
Just 6.46 billion shares changed hands in composite trading, another lower-than-average day of activity.
Technology stocks again outperformed after Broadcom reported strong results on Monday night, the latest in a string of chip companies to delight investors. The stock jumped 9.4 per cent to $38.20.
Shares of top Chinese search engine Baidu rose 5 per cent to $164.36, a day after it forecast revenue well ahead of Wall Street expectations.
The SPDR Technology Select Sector Index exchange-traded fund was up 0.3 per cent.
Second-quarter earnings that have been mostly stronger than expected have offered protective armour for a market battered by the debt debate.
At the close the Dow Jones industrial average was down 91.50 points, or 0.73 per cent, at 12,501.30.
The Standard & Poor’s 500 index was down 5.49 points, or 0.41 per cent, at 1,331.94.
The Nasdaq Composite Index was down 2.84 points, or 0.10 per cent, at 2,839.96.
Weighing on the Dow were shares of 3M, the conglomerate whose products range from Post-It Notes to specialty films for computers and televisions. Its share dropped 5.4 per cent to $89.93, hurt by softness in some divisions even though its results met estimates.
Among other decliners, Netflix slid 5.2 per cent to $266.91, a day after the film rental company warned its red-hot subscriber growth would cool in the third quarter. – (Reuters)
