Stocks were set for a third straight day of declines as the political deadlock over raising the debt ceiling and a decline in durable goods orders kept investors away.

A Republican plan to cut the deficit met stiff opposition, reducing the chances of a late compromise to avoid a crippling debt default.

Even if there is no default, the government could face a downgrade in its triple-A rating, which would raise borrowing costs and deal a blow to the economic recovery.

Credit Suisse strategists see a 50 percent chance of a credit rating downgrade on U.S. debt, even if the ceiling is raised as key decisions on fiscal tightening are delayed until after the 2012 elections.

Further pressuring market sentiment, new orders for long-lasting U.S. manufactured goods fell unexpectedly in June, and a gauge of business spending plans slipped.

The disappointing data adds to the theme of a slowing global economy, which has been somewhat forgotten by some with the markets focus on European and U.S. debt concerns, said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.

S&P 500 futures fell 4.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were down 16 points, and Nasdaq 100 futures dipped 12.75 points.

Dunkin' Brands Group Inc has raised $422.75 million after pricing its IPO at $19 per share, well above the range set by underwriters. Inc reported a surge in quarterly revenue late Tuesday, but profits slipped as the largest Internet retailer kept spending on distribution, technology and digital content. The stock was up 5.5 percent at $226.00 in premarket trade.

Boeing Co shares rose 3.3 percent to $72.50 after the planemaker's quarterly profit shattered expectations on a 6 percent increase in revenue.

Dow Chemical Co shares were up 2.1 percent at $36.60 after the company said profit rose about 74 percent.

WellPoint Inc posted better-than-expected profits, but its shares fell 3.5 percent to $71.00 after the health insurer warned that costs for its Medicare plans for seniors were higher.

Financial stocks were in focus after European banks such as Societe General and Banco Santander fell after a downgrade by Goldman Sachs. The brokerage cut the banks to neutral from overweight, saying doubts over a Greece rescue package have started to emerge.

Gold prices hit another record high at more than $1,623 an ounce, while the cost of insuring U.S. debt against a default in the next year hit a new high, according to data monitor Markit.

The stalemate in U.S. debt talks dragged down stocks for a second day on Tuesday, and light volume indicated that investors were reluctant to make bets despite another round of healthy earnings.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)