Wall Street stocks fell on Wednesday as investors dumped technology shares after their recent strong performance and as faltering debt talks kept the market on edge.
A profit warning from Juniper Networks
The debt ceiling debate has grabbed much of the attention this week as the deadline draws closer. Lawmakers have until August 2 to agree a deal or face a potential default on U.S. government debt.
The S&P 500 <.SPX> has lost 2.6 percent so far this week as acrimonious debate about raising the U.S. debt ceiling has left investors fretting over a U.S. debt default or a possible credit downgrade later in the year.
For the day, the S&P technology index <.GSPT> dropped 2.7 percent after the earnings disappointments.
It's causing people to rethink their portfolios and move some stuff around, especially on the technology side. (With) Juniper down 20 percent, I think a lot of that spilling over into some of these telecom and other companies, said Stifel Nicholas technology trader Adam Tracy in San Francisco.
The Dow Jones industrial average <.DJI> was down 159.13 points, or 1.27 percent, at 12,342.17. The Standard & Poor's 500 Index <.SPX> was down 22.96 points, or 1.72 percent, at 1,308.98. The Nasdaq Composite Index <.IXIC> was down 65.57 points, or 2.31 percent, at 2,774.39
The S&P 500 and the Nasdaq have fallen for three straight days while the Dow was eyeing its fourth day of losses as the uncertain environment kept investors from making big commitments.
We haven't been committing new capital. We've been holding off on making any purchases over the last few days, said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. If you multiply us by the other 10,000 money managers, you get a sense of why the market is getting a little soft.
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.
Moderating order growth at Emerson Electric Co
The Emerson outlook came after troubling signs from Caterpillar
Tech, on the other hand, has stood out as a bright spot in second-quarter earnings.
The overall mean change in S&P 500 technology earnings estimates for the second quarter is a positive 2.2 percent, the best of the 10 S&P sectors, according to Thomson Reuters StarMine data.
(Additional reporting by Edward Krudy; Editing by Kenneth Barry)