US stocks retreat amid budget talk between Democrats and Republicans

U.S. stocks fell, after two days have passed since the beginning of the partial government shutdown, as investors watched for progress on ending an impasse over federal spending that shut down the government a second day.

The S&P 500 lost 0.1% to 1,693.87 at 4 p.m. in New York, trimming an earlier drop of as much as 0.9%. The Dow Jones Industrial Average fell 58.56 points, or 0.4%, to 15,133.14. About 5.8 billion shares changed hands on U.S. exchanges, in line with the three-month average.

Concern over a government shutdown and a disappointing report on private-sector job growth weighed on stocks. While benchmarks gained Tuesday, the first day of the shutdown, worry had started to creep in by Wednesday morning, market participants noted.

“The idea yesterday was that its only going to last a day or two, so you might as well buy now,” said to Wall Street Journal, Michael ORourke, chief market strategist at brokerage JonesTrading Institutional Services. “That didnt happen.” he added.

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday in an attempt to break a deadlock that has shut down wide swaths of the federal government, but there was no breakthrough.

In corporate news, Alcoa sank 1.8% to $8.02. Deutsche Bank reduced its recommendation to “sell” from “hold”, citing the outlook for lower aluminum prices. Shares of the company could fall 33% to as low as $5.50 in the next year, according to the estimation led by the firm, which also said Alcoa should consider spinning off its primary metals business.

Monsanto lost 1% to $104.04. The company reported a fourth-quarter loss that was wider than anticipated and said earnings for the year that began Sept. 1 will be no more than $5.20 a share excluding acquisition costs. Analysts estimated profit of $5.34 on average. Monsanto also agreed to buy farm-data company The Climate Corp. for $930 million.

Global Payments, the bank card processor added 11% to a record close of $56.49. The firm forecast cash earnings in 2014 will be as much as $4.05 a share after earlier predicting profit will be no more than $4.

European markets closed broadly lower, though Italian stocks gained as the countrys recent political shakings looked to be coming to an end. Italys FTSE MIB Index rose 0.7% after former Prime Minister Silvio Berlusconi said he would support the current government coalition. The Stoxx Europe 600 closed down 0.7%. Most Asian markets closed higher.