U.S. stocks fell, with the Standard & Poor’s 500 Index dropping the most in a month, as data showed weaker-than-forecast growth in service industries and concern over partial government shutdown.
The S&P 500 lost 0.9% to 1,678.66 at 4 p.m. in New York, its steepest slide since Aug. 27. The Dow Jones Industrial Average fell 136.66 points, or 0.9%, to 14,996.48. About 6.3 billion shares changed hands on U.S. exchanges, or 8.6 percent more than the three-month average.
The Institute for Supply Management’s non-manufacturing index disappointed with 54.4 in September from 58.6 the prior month. The figure includes industries that range from utilities and retail to health care, housing and finance and make up almost 90% of the economy.
However, most investors remained confident that Washington would resolve the more pressing issue of raising the nations debt ceiling, despite the stalemate over funding the government. The Obama administration underscored the economic consequences of a long-term fight over spending and the borrowing limit.
“Im not sitting here expecting a default,” said for The Wall Street Journal, Chris Bertelsen, chief investment officer of Global Financial Private Capital, a $2.3 billion money manager in Sarasota, Fla., adding that he has been cautiously buying stocks the past two days. “Its hard to guess what goes on as far as the political situation is concerned, but from an investment viewpoint there are some opportunities this has created.”
Dow component Boeing sank after it warned that deliveries of some of its jets could be delayed due to the the partial government shutdown.
Fellow blue chip United Technologies dropped after the defense contractor said it would be forced to furlough 2,000 workers at a facility that makes Black Hawk helicopters for the Defense Department. It warned that number could double if the shutdown lasts through next week.
Eli Lilly retreated 3.4% to $48.80. The drugmaker said a slowdown in emerging markets and the weakening of the yen will make it more difficult for it to meet its 2014 sales target.
PVH Corp. added 4.4% to $122.69. The maker of Calvin Klein and Tommy Hilfiger clothing said yesterday that it plans to sell its G.H. Bass and Co. division to G-III Apparel Group Ltd. for $50 million in cash.