By Lu Wang
By Lu Wang
NEW YORK - U.S. stocks fell, with the Standard & Poor’s 500 Index headed for its first weekly drop since August, amid concern the budget impasse will hurt economic growth in the world’s largest economy.
United Continental Holdings Inc. dropped 6.3 as the world’s largest carrier cut its third-quarter forecast for a benchmark revenue gauge. J.C. Penney Co. slid 8.8 percent after the retailer began selling 84 million shares to raise as much as $932 million in cash. Nektar Therapeutics tumbled 23 percent after a study of the slow-release painkiller NKTR-181 failed to meet its goals. Nike Inc. surged 4.9 percent as fiscal first- quarter profit topped analysts’ estimates.
The S&P 500 fell 0.3 percent to 1,693.08 at 12:34 p.m. in New York. The Dow Jones Industrial Average retreated 72.28 points, or 0.5 percent to 15,256.02. Trading in S&P 500 stocks was 13 percent above the 30-day average at this time of day.
“There is nothing in the economic data I can see that tells me I should worry about a recession,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm oversees about $217 billion. “A government shutdown would be a fiscal cliff that’s big enough in this case to drive the economy into a recession and I think that the market is increasingly worried about that risk because the risk seems to be rising.”
The S&P 500 has declined six of the past seven sessions and has slid 1 percent this week as concern grew that Congress will fail to approve a federal budget before Monday’s deadline, leading to a government shutdown. The index rose 0.3 percent yesterday, snapping its longest losing streak this year, after an unexpected drop in jobless-benefit claims.
The U.S. Senate plans to vote today on a spending bill, three days before federal spending authority runs out. House Speaker John Boehner said yesterday his chamber wouldn’t pass a “clean” bill after the Senate acts and then said he has “no interest in seeing a government shutdown.”
Congress must also reach a deal to avoid hitting the limit on the government’s ability to borrow. Treasury Secretary Jacob J. Lew said the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt cap could lead to a downgrade of the government’s credit rating.