Stocks fell on Tuesday as investors fretted about a possible credit downgrade amid concerns that economic growth could remain subdued.
The S&P 500 fell for the seventh straight session, adding to losses after equities suffered their worst week in a year last week. Stocks have been pressured by uncertainty related to the U.S. debt ceiling negotiations.
The U.S. House of Representatives late Monday passed a last-minute compromise to raise the U.S. debt ceiling and avert a U.S. debt default. The Senate was to vote on the deal at noon EDT.
Still, many investors feared the measure doesn't go far enough to satisfy rating agencies, which have threatened a U.S. government credit downgrade that could increase Treasury rates and raise borrowing costs.
There's been no clear direction, given about how these issues will ultimately be resolved, which is another reason the market is concerned, said Kenneth Buckfire, chief executive officer at Miller Buckfire in New York. The growth prospects of the U.S. are limited.
In the latest economic data, U.S. consumer spending fell unexpectedly in June to post the first decline in nearly two years as incomes barely rose, the government reported.
A weak reading on manufacturing on Monday underscored growing concerns about the economy's strength.
The Dow Jones industrial average <.DJI> was down 40.79 points, or 0.34 percent, at 12,091.70. The Standard & Poor's 500 Index <.SPX> was down 5.65 points, or 0.44 percent, at 1,281.29. The Nasdaq Composite Index <.IXIC> was down 0.94 points, or 0.03 percent, at 2,743.67.
European debt problems returned to the forefront after French bank BNP Paribas SA
The Nasdaq was helped by Cognizant Technology Solutions Corp
Agricultural processor Archer Daniels Midland Co
Wal-Mart Stores Inc
(Editing by Jeffrey Benkoe)