Stocks closed at session lows and volatility (^VIX) spiked after little progress was made to break the budget stalemate on Capitol Hill. The Dow (^DJI) and S&P 500 (^GSPC) both dropped over 1%. The tech-heavy Nasdaq (^IXIC) was hit hardest, falling 2% after a big sell-off in social media stocks (SOCL) dragged on the sector. Here are some of the worst performers: Facebook (FB) -6.7%, Netflix (NFLX) -5%, LinkedIn (LNKD) -6.1%, Pandora (P) -9%, Yelp (YELP) -7.8%, Yahoo (YHOO) -3.5%.
Selling picked up during President Obama's news conference shortly after 2p est. The President turned up the heat, saying he was willing to talk with Republicans after they agree to fund the government and raise the debt limit. Meanwhile, House Republicans are calling for face-to-face negotiations to resolve differences before moving forward.
Earlier in the day, Republicans introduced the "Deficit Reduction and Economic Growth Working Group Act of 2013." The bill calls for the creation of a new supercommittee made up of ten House and ten Senate members that would recommend spending reforms and changes to the debt ceiling. The House Rules Committee will consider the bill before pushing for a vote on the House floor. Senate Democrats are moving in a different direction. Majority Leader Harry Reid is expected to introduce a clean bill to raise the debt limit later today.
And stay tuned for House Speaker John Boehner, who's expected to release a statement in response to President Obama at 4:30p est.
In other news, earnings season is getting underway.
Alcoa (AA) posted third-quarter profit of $0.11 a share (ex-items) on revenues of $5.77 billion. Analysts were expecting $0.06 a share on $5.6 billion in revenue. This is the aluminum-maker's first quarterly report since being replaced by Nike (NKE) in the Dow Jones Industrial Average last month.
Here are some other stocks grabbing investor attention today.
Talisman Energy (TLM) pared early gains to close down 2.4%, despite billionaire investor Carl Icahn disclosing a position in the stock late Monday. In a tweet Icahn stated he "may have conversations with management re strategic alternatives, board seats, etc." According to a 13-D filing, Icahn's position represents a 5.97% stake in the oil and natural gas producer.
Jamba (JMBA) is feeling the consumer squeeze. Shares fell 19% after cutting its sales outlook for fiscal 2013 and warning on 2014. The company, which owns and franchises Jamba Juice stores, is blaming a slowdown in consumer spending and adverse weather conditions for taking a big bite out of same-store sales. They're now expecting flat to one-percent growth for company-owned stores this year. And they're expecting a 3.4% drop in same-store sales for the third quarter alone. Shares are down more than 12% over the last three months.
Alcatel-Lucent (ALU) fell 8.8% after announcing massive job cuts to accelerate its $1.4 billion turnaround plan. The French network-equipment maker plans to eliminate 10,000 jobs worldwide, roughly 15% of its workforce. The cuts will hit particularly hard in Europe, the Middle East and Africa.
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