March 4, 2021

Shares Decline as Wall Street Waits on Washington

Wall Street stocks fell Tuesday as Washington lawmakers remained in a bitter stalemate over how to resolve the nation’s debt problems.

Republican and Democratic leaders have offered competing proposals to avoid a catastrophic default on the government’s debt. But a resolution still appeared a long way off. President Barack Obama called for a compromise in a televised address late Monday, but House Speaker John Boehner said efforts to negotiate with the White House had been futile.

By mid-morning, Dow Jones industrial average was down 89.04 points, or 0.71 percent, to 12,503.76.

The Standard Poor’s 500-stock index 6.70 points, or 0.50 percent, to 1,339.73, and the Nasdaq composite index lost 8.62 points, or 0.30 percent, to 2,834.18.

“Right now, everybody’s just on pause, waiting to see what happens with the debt ceiling,” said Dan Neuger, head of American and European active equities at PineBridge Investments.

Worries about debt problems in the United States and Europe have caused the VIX, a measure of the stock market’s volatility, to rise 17 percent in July. But stocks are still up for the month. Through Monday, the Dow was up 1.4 percent, while the S.P. 500 was up 1.3 percent. The Nasdaq composite was up 2.5 percent.

One reason for the gains: stronger earnings. Companies in the S.P. 500 are on track to report record profits in the second quarter. Earnings are expected to rise 12.5 percent compared to the same period a year ago, according to FactSet. Revenue is expected to jump 8.3 percent.

Ford rose about 2 percent after the company’s sales rose more than analysts expected. Its profit fell 8 percent, though, as it spent more on raw materials like steel and copper.

Lockheed Martin rose nearly 3 percent ahead of the opening. The military contractor raised its 2011 earnings forecast after reporting that its profit dipped, in part, because of charges tied to job cuts.

United Parcel Service said its earnings rose 26 percent, helped by continued strength in Asian and European exports. But its stock slipped about 1 percent after its revenue came in lower than analysts had anticipated.

JetBlue also fell about 1 percent after its earnings dropped 19 percent because of higher costs for fuel and maintenance.

Bond yields fell slightly, pushing prices higher. The yield on the 10-year Treasury note fell to 2.99 percent from 3.00 percent late Monday.

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