U.S. stocks sank as government shutdown is near

U.S. stocks slid, paring a quarterly gain for the Standard & Poor’s 500 Index, as a stalemate in the federal budget discussions increased the likelihood of a government shutdown.

The S&P 500 fell 0.8% to 1,677.72 at 9:55 a.m. in New York. The benchmark gauge has added 2.7% this month, extending its quarterly gain to 4.4%, as the Federal Reserve kept its $85 billion of monthly bond-buying. The Dow Jones Industrial Average lost 150.21 points, or 1%, to 15,108.03 today. Trading in S&P 500 stocks was 2.9% above the 30-day average at this time of day.

“The negative market reaction is appropriate,” Tim Hartzell, who helps manage about $425 million as chief investment officer at Sequent Asset Management, said to Bloomberg via phone from Houston. “Weve been down this road before. It’ll last until there’s some disruption or event that’ll cause outrage in the public and then the politicians snap in line to settle it.”

Lawmakers had hours left to agree on a budget deal Monday, and after a weekend spent digging into their positions, the government appeared to be headed for a partial shutdown for the first time since 1996.

In corporate news, Achillion Pharmaceuticals Inc. erased 52% to $3.50 after saying U.S. regulators are keeping its experimental hepatitis C drug on hold because of abnormal liver results. The Food & Drug Administration determined Achillion should not resume development of its Sovaprevir drug even after the company responded to all the issues raised by the agency in June, according to a statement late Sept. 27.

J.C. Penney Co. Inc. shares retreated nearly 3%, extending a 30% plunge from last week. The retailer sold 84 million shares late Thursday and said it would use the funds for “general corporate purposes.”

Some analysts revised down their price targets for BlackBerry on Monday after the smartphone company’s poor earnings on Friday. Nomura analysts cut their BlackBerry price target to $8 from $9, while Canaccord Genuity analysts lowered their price target to $7 from $9. BlackBerry shares fell 1.4%.