* Profit-taking hits 2013's winners, including Facebook,
* Lack of progress in Washington boosts volatility
* Alcoa, Yum Brands report after close of trading
* Indexes down: Dow 0.6 pct, S&P 0.8 pct, Nasdaq 1.7 pct
By Julia Edwards
NEW YORK, Oct 8 U.S. stocks fell on Tuesday, led
by tech stocks that have made some of the biggest gains this
year, as the lack of progress in ending the fiscal crisis in
Washington prompted more selling.
As the partial U.S. government shutdown continued for a
second week and with only nine days left for Congress to raise
the U.S. debt borrowing limit, equity markets that have taken
the political battle in stride showed growing concern.
The technology sector was the biggest loser on the S&P 500,
with investors targeting stocks that have outperformed
throughout the year and even held up well as the broader market
has come under modest pressure in the last couple of weeks.
Facebook was the biggest drag on the Nasdaq 100, down
5.9 percent to $47.50. Shares of TripAdvisor lost 5.7
percent to $71.51 a share, and Netflix fell 4.9 percent
to $302.30. Both TripAdvisor and Netflix are among the top
performers this year on the S&P 500, and Facebook is among the
top performers on the Nasdaq 100.
"All of the sudden, you've got these question marks coming
in from earnings reports and the government shutdown and you've
got these portfolio managers saying, 'What is left here for me
to keep my neck out? Why not take some profit?'" said Daniel
Morgan, senior portfolio manager at Synovus Trust Company in
The CBOE Volatility Index, a measure of investor
anxiety, rose to 20.17, the highest since June 24 and well above
its 14-day moving average of 15.79. A level above 20 is
generally associated with increasing concern about the near-term
direction of the market.
House Republican leaders announced a proposal to establish a
20-member bipartisan deficit-reduction committee that would be
tasked with finding a budget solution to end the government
The longer the government shutdown continues, the greater
the damage to the economy, according to analysts, increasing the
probability the Federal Reserve will leave its stimulus measures
President Barack Obama refused House Speaker John Boehner's
public request for a meeting to negotiate the terms of ending
the partial government shutdown and raising the debt ceiling.
The Dow Jones industrial average was down 87.66
points, or 0.59 percent, at 14,848.58. The Standard & Poor's 500
Index was down 12.86 points, or 0.77 percent, at
1,663.26. The Nasdaq Composite Index was down 62.52
points, or 1.66 percent, at 3,707.85.
After Tuesday's market close, former Dow component Alcoa Inc
will report earnings, as will KFC parent company Yum!
McKesson Corp rose 3.7 percent to $134.44 as a top
performer on the S&P 500 after Dow Jones Newswires reported the
company was in advanced talks to take over Celesio in
a possible $5.08 billion deal.
J.C. Penney Co Inc rose 3.1 percent to $7.95 after
the struggling retailer reported a smaller decline in same-store
sales for September compared with August and said it was seeing
positive signs in many areas of its business.