Wall Street Losing Patience on Shutdown Deal

Stocks drop, ending recent rally as optimism about deal fades.

Trader Kenneth Polcari, right, works on the floor of the New York Stock Exchange Tuesday, Oct. 15, 2013.
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Stocks dropped on Tuesday shortly after markets opened on the 15th day of the U.S. government shutdown, reflecting investor skepticism about whether Congress can reach a deal ending the crisis, along with disappointment about manufacturing and earnings reports.

The Dow Jones Industrial Average dropped 0.1 percent to 15,283 as of 11:20 a.m. EDT, while the S&P 500 decreased 0.1 percent to 1709, and the Nasdaq Composite Index had an uptick of 0.1 percent to 3822, the Wall Street Journal reports.

[READ: Obama Meets With Wall Street CEOs on Shutdown Impasse]

This decline ends a four-day rally when investors appeared at their most optimistic since the start of the government shutdown. The S&P 500 reached its highest level since Sept. 19 on Monday in a four-day rally not seen since January, according to Bloomberg.

Citigroup Inc., the third-biggest U.S. bank, also reported a profit that was lower than analysts predicted, which contributed to the decline in stocks. A key survey published on Tuesday by the Federal Reserve Bank of New York also dampened investors' spirits, as the Empire State Manufacturing Survey dropped to 1.52 in October from 6.29 in September, which was far worse than the expected decline to 5.5 percent.

[MORE: Wall Street Asks: What Shutdown?]

Treasury yields rose to 2.708 percent on Tuesday from 2.684 percent on Friday. Short-term Treasury bills have been selling recently as fears increase that the government might not be able to guarantee its debt payments. The deadline for the government to reach a debt ceiling deal and avert a default is reportedly Oct. 17.

 

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