Wall Street declines on Fed, Washington uncertainty
A trader works on the floor of the New York Stock Exchange shortly after the start of trading in New York, September 23, 2013. REUTERS-Lucas Jackson
By Chuck Mikolajczak
NEW YORK | Mon Sep 23, 2013 12:26pm EDT
(Reuters) - U.S. stocks fell on Monday as comments by a Federal Reserve official and a looming political deadline in Washington outweighed earlier upbeat economic data from Germany and China.
Referring to the timeline that Fed Chairman Ben Bernanke articulated in June, New York Fed President William Dudley said the framework for withdrawing stimulus is "still very much intact" as long as the economy keeps improving.
Investors were caught off guard last week when the Fed decided against reducing asset purchases from the current $85-billion monthly pace after many had anticipated a change in policy would come in September.
The S&P 500 had rallied 1.2 percent last Wednesday after the decision by the Fed. But the index is now on pace for a third straight decline, in which it has dropped 1.5 percent.
Adding to concerns was the approaching Oct 1 deadline for Congress to avoid a government shutdown as lawmakers negotiate ahead of the end of the fiscal year on September 30.
"A combination of hearing lots of Fed presidents, and people from Capitol Hill talking, will always put investors in a bad mood," said Ron Florance, deputy chief investment officer at Wells Fargo Private Bank in Scottsdale, Arizona.
"None of them are providing clarity. They are just providing more uncertainty and angst."
A flood of new orders gave a boost to European and Chinese firms in September, according to surveys that added to evidence that the global economy is healing, but U.S. factory activity lost some momentum.
Other Fed officials were on the speakers' circuit Monday, and traders will be paying close attention after St. Louis Fed chief James Bullard said Friday the Fed could still decide to start trimming its stimulus in October if data warrant it.
The Dow Jones industrial average .DJI fell 50.35 points or 0.33 percent, to 15,400.74, the S&P 500 .SPX lost 9.36 points or 0.55 percent, to 1,700.55 and the Nasdaq Composite .IXIC dropped 22.806 points or 0.6 percent, to 3,751.922.
Apple shares were a bright spot, up 3.7 percent to $484.12 after it said it sold 9 million iPhone 5s and iPhone 5c models since their launch on Friday.
U.S.-traded shares of BlackBerry (BBRY.O) slumped 4.9 percent to $8.30. The Canadian smartphone maker announced Friday a change in focus away from the consumer in favor of businesses and governments. The move has fueled fears about BlackBerry's long-term viability.
Citigroup led the S&P financial sector .SPSY lower, a day after the Financial Times reported Citi had a significant drop in trading revenue during the third quarter which could hurt the bank's earnings. Citi shares fell 3 percent to $49.67 and the S&P financial index lost 1.5 percent as the worst performing of the 10 major S&P sectors.
The widely followed Dow Jones industrial average .DJI opened Monday with three new components. Goldman Sachs (GS.N), Visa (V.N) and Nike (NKE.N) replace Bank of America (BAC.N), Hewlett-Packard (HPQ.N) and Alcoa (AA.N).
Shares of Goldman, Visa and Nike and HP all declined Monday while Alcoa edged higher and Bank of America fell with the financial sector.
(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)
