FOX Business: The Power to Prosper
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The blue chips closed near session lows after another day of negotiations in Washington yielded little results on the debt ceiling debacle, and traders mulled a deluge of corporate and economic data.
The Dow Jones Industrial Average fell 91.5 points, or 0.73%, to 12,501, the S&P 500 dipped 5.5 points, or 0.41%, to 1,332 and the Nasdaq Composite fell 2.8 points, or 0.1%, to 2,840. The FOX 50 fell 2.9 points to 945.
After another day of tense negotiations on Capitol Hill and in the White House, lawmakers remained deadlocked on how to raise the U.S. debt ceiling and begin slicing America's public debt burden.
Numerous plans emerged earlier in the week, including one backed by Republican House Speaker John Boehner and another by Senate Democratic Leader Harry Reid. However, neither plan has been able to gain traction and bridge the deep ideological divide.
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"At this point, neither proposal looks likely to become law without further modification," analysts at Goldman Sachs wrote in a note to clients.
If Congress is unable to raise the debt ceiling by the Aug. 2 deadline, America may be forced to default on its debt. Additionally, ratings companies have warned that they will slash the country's top-notch AAA credit rating in the case of a debt limit impasse or a default.
In either case, economists say, the shockwaves of a major American debt could reverberate around world markets and endanger the already fragile global economic recovery.
Market participants also mulled a slew of second-quarter earnings report from high-profile companies.
Ford (F) revealed earnings excluding one-time costs of 65 cents a share, less than the 68 cents it earned during the same period last year, but easily topping analysts' estimates. The automaker said its revenue climbed 13% to $35.5 billion.
3M (MMM) posted profits of $1.60 a share on a record $7.7 billion in revenue. The diversified technology company's profits were in line with expectations, while revenue topped expectations by $100 million. The company said it expects to earn from $6.32 to $6.47 for the full year, excluding costs.
On the economic front, the S&P/Case-Shiller home price index gained 1% in May, better than the 0.7% rise analysts had been expecting. Prices, however, are off 4.5% from last year, which is in line with forecasts. The housing market has been negatively affected by high supply, and weak underlying economic conditions.
Consumer confidence climbed to 59.5 from a revised 57.6 in July, according to the Conference Board. Economists expected a reading of 56 for the month. However, a previous survey of consumer sentiment released earlier in the month came in considerably below forecasts.
A major factor in decision making among consumers, several economic studies show, is their confidence in the economy. Therefore, sales across the board can be affected by these data.
New home sales fell 1% to an annualized unit rate of 312,000, according to the Commerce Department, falling short of estimates of 320,000.
In currencies, the euro jumped 0.98% against the U.S. dollar, while the greenback fell 0.83% against a basket of world currencies.
Energy markets finished a volatile trading day in the green.
Light, sweet crude rose 39 cents, or 0.39%, to $99.59 a barrel. Wholesale RBOB gasoline gained 3 cents, or 0.87%, to $3.15 a gallon.
Consumer gasoline prices were essentially unchanged overnight. A gallon of regular at the pump costs $3.69 on average, up from $3.58 last month, but down from $2.74 last year, according to the AAA Fuel Gauge report.
Gold gained $4.90, or 0.3%, to $1,619 a troy ounce -- hitting yet another nominal record high. Silver rose 34 cents, or 0.83%, to $40.70 a troy ounce.
Netflix (NFLX) shares plummeted after the video rental and streaming company said a recent price hike will hit its near term subscriber growth.
United Parcel Service (UPS) revealed adjusted earnings of $1.05 a share for the second quarter, topping expectations by a penny.
Baidu's (BIDU) earnings per depository share nearly double to 72 cents, zipping past expectations of 66 cents. Shares of China's top search engine soared on the report.
RadioShack (RSH) posted quarterly results that missed expectations, but shares got a boost after the technology retailer said it would cut its unprofitable partnership with T-Mobile and instead partner with Verizon Wireless.
The English FTSE 100 gained 0.06% to 5,929, the French CAC 40 dipped 0.54% to 3,792 and the German DAX edged higher by 0.1% to 7,352.
In Asia, the Japanese Nikkei 225 climbed 0.47% to 10,098 and the Chinese Hang Seng soared 1.3% to 22,572.