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US STOCKS-Wall St drops as Washington deadlock continues
October 7, 2013 / 1:52 PM / 4 years ago

US STOCKS-Wall St drops as Washington deadlock continues

* Debt ceiling deadline draws closer

* Cooper Tire slumps on buyout squabble

* Indexes off: Dow 0.99 pct, S&P 500 0.85 pct, Nasdaq 0.8 pct

By Chuck Mikolajczak

NEW YORK, Oct 7 (Reuters) - U.S. stocks dropped on Monday as the partial U.S. government shutdown dragged on with no signs politicians were willing to relax positions over the debt-ceiling limit or budget impasse.

Republican House Speaker John Boehner vowed on Sunday not to raise the U.S. debt ceiling without a “serious conversation” about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a U.S. default.

The United States faces a deadline of Oct. 17 to raise its $16.7 trillion debt limit or risk an unprecedented debt default. The two issues of emergency funding for the government to operate and increase the U.S. borrowing authority started out separately in the House but have been merged by the pressure of time.

“Now you’ve got not only the budget but the debt ceiling and time is running out and everybody knows it, including (the politicians),” said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.

“The longer this goes on, the more the uncertainty, the closer the deadline and the more nervous investors are going to be.”

The S&P 500 has fallen for two straight weeks and is down nearly 3 percent from its all-time high of 1,725.52 on concerns about the effect of Washington dysfunction on the economy.

Each of the 10 major S&P sectors were lower, with financials and energy the worst performers. Exxon Mobil Corp, down 1 percent to $85.42, and Wells Fargo & Co , off 1.5 percent to $49.70 were the biggest drags on the S&P 500 index.

The Dow Jones industrial average fell 149.44 points or 0.99 percent, to 14,923.14, the S&P 500 lost 14.4 points or 0.85 percent, to 1,676.1 and the Nasdaq Composite dropped 30.381 points or 0.8 percent, to 3,777.373.

Apollo Tyres of India and U.S.-based Cooper Tire & Rubber Co disagree over whether Apollo should pay a lower price in its $2.5 billion takeover, the latest hurdle in a deal beset by lawsuits, labor issues and unhappy Apollo investors. Cooper Tire shares slumped 11.4 percent to $26.15.

U.S.-listed shares of BlackBerry rose 4 percent to $8.00 after several sources close to the matter said it is in talks with Cisco Systems, Google Inc and SAP about selling them all or parts of BlackBerry.

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