Looming Washington debt deadlines drag Wall St lower
By Rodrigo Campos
NEW YORK (Reuters) - U.S. stocks fell on Friday, with the S&P 500 and Dow poised to drop for the first week in four, as concerns grew over a lack of compromise in debt and budget negotiations by lawmakers in Washington.
The S&P is about 2 percent below its record high set last week and is facing resistance at its 50-day moving average, now near 1,699.
Congress has yet to forge an agreement that would keep the U.S. government running and avoid a debt default. Investors are concerned about the implications of a shutdown and possible default on an already-fragile economic recovery.
"The two sides seem a little more steadfast in their positions this time," said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
He said the S&P has pulled back in a consolidation move from its record, and after Congress reaches a deal, it will continue to move higher.
"We all know they have to (compromise) and the market knows that, so I don't think it's being too complacent," he said.
The Republican-controlled House and the Democratic Senate are bouncing back bills, with each party anxious to pin responsibility for any economic damage on the other.
Meanwhile, the president of the Federal Reserve Bank of Chicago, Charles Evans, said the Fed could start reducing its asset purchases this year based on economic forecasts but the decision to wind back stimulus could be pushed into next year.
Several Federal Reserve officials are due to speak Friday, and markets will examine their remarks with interest for clarity on the immediate future of the Fed's stimulus program which has propped up the economy and equity markets this year.
Influential New York Fed President William Dudley will speak on the economy in Syracuse, New York at 2:00 p.m. (1800 GMT).
The Dow Jones industrial average fell 103.52 points, or 0.68 percent, to 15,224.78, the S&P 500 lost 9.74 points, or 0.57 percent, to 1,688.93 and the Nasdaq Composite dropped 12.427 points, or 0.33 percent, to 3,775.
Data showed U.S. household spending rose in August as incomes increased at their fastest pace in six months, a sign that momentum could be picking up in the U.S. economy despite months of harsh government austerity, while consumer sentiment slid in September to its lowest in five months.
J.C.Penney (NYS:JCP - News) announced the pricing of its public offering of 84 million common shares priced at $9.65 per share. The stock fell 8.2 percent to $9.57.
Nike Inc (NYS:NKE - News) shares jumped 5.5 percent to $74.24, a day after the maker of sports clothes and shoes reported a stronger-than-expected quarterly profit.
(Editing by Bernadette Baum)
