Stocks dropped for a third straight day on Wednesday, with the Nasdaq off 2 percent, as a political deadlock over the debt ceiling and a decline in durable goods orders kept investors away from risky assets.
The S&P 500 <.SPX> has lost about 2 percent this week on worries of a possible U.S. debt downgrade.
Corporate earnings have been coming in relatively weak in recent days, compared to the beginning of the earnings season, also weighing on the market.
We started off the earnings season with a bang, but the ones that we've been getting in the past few days, mostly industrial ones, have been on the light side, and often pointing to an economic slowdown. That's triggering an early morning selloff, said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
The Dow Jones industrial average <.DJI> slid 127.11 points, or 1.02 percent, at 12,374.19. The Standard & Poor's 500 Index <.SPX> was down 18.79 points, or 1.41 percent, at 1,313.15. The Nasdaq Composite Index <.IXIC> tumbled 57.29 points, or 2.02 percent, at 2,782.67.
U.S. industrial conglomerate Emerson Electric Co
Juniper Networks Inc
The PHLX semiconductor index <.SOX> fell 3.6 percent, its worst drop since February 2.
But Amazon.com Inc
A Republican plan to cut the U.S. deficit met stiff opposition, reducing the chances of a late compromise to avoid a default.
Further pressuring the market, new orders for long-lasting U.S. manufactured goods fell unexpectedly in June, and a gauge of business spending plans slipped.
(Reporting by Angela Moon; editing by Jeffrey Benkoe)