Stocks weighed down by Washington woes

Written By limadu on Rabu, 25 September 2013 | 21.29

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NEW YORK (CNNMoney)

The Dow Jones Industrial Average, S&P 500 and Nasdaq were all down slightly in early trading Wednesday. If the Dow and S&P 500 finish the session lower, that will be their fifth straight day of losses.

Most global stock indexes were also in the red.

There are concerns that Congress will be unable to adequately deal with the country's debt ceiling woes, which means the government risks defaulting on its debt next month. Treasury Secretary Jack Lew warned Tuesday that Wall Street should take the looming debt limit more seriously and wrote in a letter to Congress Wednesday that the debt ceiling would be reached no later than October 17.

Related: Fear & Greed Index slides into fear

Investors also considered the possibility that the U.S. government might shut down on Oct. 1, which could hit economic growth.

Societe Generale analyst Kit Juckes compared the impending government shutdown and the prospect of raising the debt ceiling to "observing a man holding a loaded shotgun, pointed at his own foot."

Related: Federal workers, surrender your iPhones during shutdown

On the economic front, durable goods orders rose more than expected in in August. And new home sales rose at a faster clip than anticipated last month.

In corporate news, shares of Yahoo (YHOO, Fortune 500) rose 2% on reports that Chinese Internet company Alibaba is moving forward with an initial public offering in New York. Yahoo is one of Alibaba's top shareholders. Yahoo's stock has surged this year due to speculation about an Alibaba IPO as well as investor enthusiasm for the turnaround strategy of CEO Marissa Mayer.

It's another bad day for J.C. Penney (JCP, Fortune 500). The stock hit its lowest level in more than a decade, dropping below $11 on concerns over the retailer's cash position and how it fared during the critical back-to-school season. There are also worries about the upcoming holiday shopping period.

Facebook (FB) stock continued to flirt with the $50 level, rising 1% after a 4% jump on Tuesday.

Shares of Carniva (CCL)l dropped another 4%. The cruise company's stock plunged on Tuesday as well after reporting dismal earnings and a weak outlook. To top of page

First Published: September 25, 2013: 9:48 AM ET


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