* Obama to meet with congressional leaders as shutdownextends to second day
* Blackberry shares rise on possible Cerberus biddinginterest
* Indexes down: Dow 0.4 pct, S&P 0.1 pct, Nasdaq 0.1 pct
By Angela Moon
NEW YORK, Oct 2 (Reuters) - Wall Street retreated onWednesday, the second day of a partial U.S. government shutdown,as political wrangling in Washington raised investor concernsthat the stoppage could be prolonged.
Adding to worries, a report showed private employers addedfewer-than-expected jobs in September. Investors were lookingfor more guidance from this data because Friday's broader,government payrolls report will be delayed if no deal on thebudget is reached by then.
Losses were across the board, led by stocks in theindustrial sector, which fell 0.4 percent.
The shutdown fight is rapidly merging with a higher-stakesbattle over the government's borrowing power that is expected tocome to a head soon. The Treasury has said the United Stateswill exhaust its borrowing authority no later than Oct. 17.
"I wouldn't call the market's decline today a panic. But thelonger this (shutdown) goes on, and the more headlines shifttowards the Oct. 17 deadline, investors are becoming more andmore concerned," said Quincy Krosby, a market strategist forNewark, New Jersey-based Prudential Financial Inc.
"As impossible as it seems, investors are thinking thatthere might now be a possibility of a default."
The Dow Jones industrial average was down 58.56points, or 0.39 percent, at 15,133.14. The Standard & Poor's 500Index was down 1.13 points, or 0.07 percent, at1,693.87. The Nasdaq Composite Index was down 2.96points, or 0.08 percent, at 3,815.02.
Congressional leaders and President Barack Obama planned tomeet in the White House at 5:30 p.m. (2130 GMT) on Wednesday todiscuss the budget impasse and raising the U.S. debt limit.
Among individual stocks, the possibility of a second offerfor Blackberry Ltd reversed a slide in itsstock price after the struggling smartphone maker said itexpected to record $400 million in pre-tax charges related tocuts announced last month. The stock ended up 0.3 percent to$78.06 after falling to a 11-month low earlier of $77.28.
Despite the recent declines, buyers have come in as the S&Papproached its 50-day moving average of 1,679.99. The movingaverage represents a measure of the near-term trend in themarket and often investors will buy in clusters at such levels.
The CBOE Volatility index, used to measure investoranxiety, rose 6.8 percent to 16.60. The index has gained morethan 25 percent over the past two weeks.
Trading volume totaled about 5.3 billion shares on the NewYork Stock Exchange, the Nasdaq and the NYSE MKT, below theaverage daily closing volume of about 6.3 billion this year.
Declining stocks outnumbered advancing stocks by about 16to 13 on the New York Stock Exchange while on the Nasdaq,decliners beat advancers by about 3 to 2.
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