US: Stocks drop on worries about debt ceiling talks

WALL Street stocks fell on Tuesday on increased worry over uncertain negotiations among Washington power brokers seeking to avoid a US debt default.

While the White House pointed to some progress in the latest round of talks with House Speaker Kevin McCarthy, markets are beginning to get more worried about the situation, analysts said.

The Dow Jones Industrial Average finished down 0.7 per cent at 33,055.51.

The broad-based S&P 500 slid 1.1 per cent to 4,145.58, while the tech-rich Nasdaq Composite Index dropped 1.3 per cent to 12,560.25.

Treasury Secretary Janet Yellen has said an agreement must be reached by June 1.

“I think the realisation hit people today, that for lack of a better word, it is getting close,” said Steve Sosnick of Interactive Brokers.

“This is the first time that I really think there’s been some real nervousness expressed about the debt situation,” Sosnick said.

Even if McCarthy and Biden can hammer out a broad deal, anything they agree to will need to be shepherded through the House of Representatives, where they face pressure from hardliners on both sides not to make too many concessions.

Among individual companies, Broadcom advanced 1.2 per cent after Apple announced a new multi-year multibillion dollar agreement for Broadcom to develop new 5G radio components. Apple shed 1.5 per cent.

SEE ALSO

US: Wall Street opens lower as debt ceiling talks remain deadlocked

Lowe’s advanced 1.7 per cent despite lowering full-year projections due to “softer-than-expected consumer demand for discretionary purchases.”

Others that reported results included AutoZone, down 5.9 per cent, Dick’s Sporting Goods, down 1.4 per cent and Williams-Sonoma, down 0.3 per cent. AFP