Stocks Fall as Congress at Government Shutdown Standstill
NEW YORK ( TheStreet) -- The S&P 500 closed the week lower Friday amid anxiety over the ongoing budget negotiations in Washington. A worse-than-expected report on U.S. consumer sentiment for September helped extend the losses seen at the market open.
Lawmakers must agree to an emergency budget deal by Monday in order to allow key federal government services to continue running through Dec. 15 from the start of the new fiscal year on Oct. 1. It's estimated that a U.S. government shutdown could reduce economic growth in the fourth quarter by up to 1.4 percentage points.
The S&P 500 slumped 0.41% to 1,691.73. The Dow Jones Industrial Average shed 0.46% to 15,258.24. The Nasdaq declined 0.15% to 3,781.59.
Investors displayed uncertainty as to whether Washington politicians would reach a deal to keep the government funded, and have not forgotten Congress' inability in summer 2011 to avoid infighting over raising the debt ceiling, said Aaron Izenstark, chief investment officer of IRON Financial.
"Unease over the budget and debt ceiling uncertainties emanating from Washington may have played some role in the decline in sentiment since the summer (similar patterns were evident prior to the fiscal cliff last year and negotiations in 2011) although other factors, such as stock market gains and improvement in the housing market, likely continue to support a gradual upward trend," Peter Newland, an economist with Barclays in New York, wrote in a client note.
International Game Technology
Revenue grew 8% to $6.97 billion. The company predicted China revenue growth in the current quarter and sales to be essentially flat for the full year.
The final September estimate on the University of Michigan Consumer Sentiment Index came in at 77.5, below both the average economist estimate of 78 and the August reading of 82.1. The September number indicates a decline in U.S. consumer sentiment to its lowest point in nearly half a year impacted by economic growth worries and rising interest rates. The figure was higher than the preliminary reading of 76.8.