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US STOCKS-Wall St falls as Washington deadline draws closer
September 27, 2013 / 4:47 PM / 4 years ago

US STOCKS-Wall St falls as Washington deadline draws closer

* J.C. Penney stock slides after pricing of offering

* Nike shares jump a day after strong earnings

* Indexes off: Dow 0.48 pct, S&P 0.37 pct, Nasdaq 0.02 pct

By Chuck Mikolajczak

NEW YORK, Sept 27 (Reuters) - U.S. stocks declined on Friday, with the S&P 500 and Dow on track for their first weekly drop in four, as debt and budget negotiations by lawmakers in Washington continued.

The S&P is roughly 2 percent below its record high set last week and is facing resistance at its 14-day moving average, now at about 1,699.

Time was running short for lawmakers to avert a partial shutdown of operations by the U.S. government on Oct. 1 as Congress struggled to pass an emergency spending bill Republicans want to use to achieve Tea Party-backed goals, such as defunding the new healthcare reform law.

The Senate on Friday was on track to pass legislation to keep the federal government operating beyond midnight Monday.

“I’ve seen the movie almost every couple of years, the movie always ends the same way - the politicians figure it out at the last minute,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

“Markets gets all scared in the meantime.”

In the latest comments from Fed officials after last week’s surprise decision by the central bank to preserve its stimulus measures, the president of the Federal Reserve Bank of Chicago, Charles Evans, said the Fed could start reducing its asset purchases this year based on economic forecasts but the decision to wind back stimulus could be pushed into next year.

Minneapolis Fed President Narayana Kocherlakota told Reuters the Fed needs to speak more clearly and tell the world it will do “whatever it takes” to boost employment, and not send the message that a very slow drop in joblessness is satisfactory.

Later in the session, influential New York Fed President William Dudley will speak on the economy in Syracuse, New York at 2:00 p.m. (1800 GMT).

The Dow Jones industrial average fell 73.99 points or 0.48 percent, to 15,254.31, the S&P 500 lost 6.27 points or 0.37 percent, to 1,692.4 and the Nasdaq Composite dropped 0.799 points or 0.02 percent, to 3,786.628.

Data showed U.S. household spending rose in August as incomes increased at their fastest pace in six months, a sign that momentum could be picking up in the U.S. economy despite months of harsh government austerity, while consumer sentiment slid in September to its lowest in five months.

J.C.Penney said its public offering of 84 million common shares was priced at $9.65 per share. The stock fell 8.7 percent to $9.51 as the worst performer on the S&P 500.

Nike Inc shares jumped 4.9 percent to $73.81 as the biggest boost to the Dow, a day after the maker of sports clothes and shoes reported a stronger-than-expected quarterly profit.

Lumber Liquidators Holdings said it was cooperating with authorities after federal agents searched its headquarters and another office in a probe of the import of certain wood flooring products, sending shares down 9 percent to $102.80.

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