Dow Slips After Debt Worries Spark Late-Day Selling

FOX Business: The Power to Prosper

A flood of headlines on the debt debate that is raging on Capitol Hill offset a round of relatively upbeat economic data, launching the blue chips into the red for the fifth straight day.

Today's Markets

The Dow Jones Industrial Average fell 62.4 points, or 0.51%, to 12,240, the S&P 500 dipped 4.2 points, or 0.32%, to 1,301 and the Nasdaq Composite gained 1.5 points, or 0.05%, to 2,766. The FOX 50 dropped 3.5 points to 926.

Headlines from Washington, D.C. have captivated Wall Street in recent days as lawmakers have struggled to come to an agreement on how to begin cutting the deficit while also raising the debt ceiling.

The Republican-controlled House of Representatives is expected to vote on Speaker John Boehner's bill late on Thursday after a key procedural vote easily passed earlier in the day.  The plan was revised on Wednesday after a score by the Congressional Budget Office found it would provide less spending cuts than expected.  The vote is expected to be tight, with most Democrats likely to vote against and deep divisions within the GOP.

Even if the measure passes the House, it is likely to face strong opposition in the Senate, where the Democratic Party has control. Indeed, the Democratic-controlled Senate is expected to vote down the bill.

"As soon as the House completes its vote tonight, the Senate will move to take up that bill. It will be defeated," said Senate Democratic Leader Harry Reid.

Economists and government officials have warned repeatedly that if the debt ceiling isn't raised, there could be severe consequences for the already fragile global recovery. Indeed, ratings companies have warned that they may downgrade the country's debt rating if lawmakers fail to craft a credible deficit-reduction bill.

On the economic front, the number of individuals applying for first-time jobless claims fell to 398,000 last week from 422,000, better than the 415,000 economists forecast. Jobless claims had been stuck above the 400,000-mark for weeks, which coupled with a dismal June jobs report, has many economists concerned that job growth is moderating.

Contracts for pending sales of previously-owned homes climbed 2.4% in June, according to the National Association of Realtors, easily beating estimates of a 2% decline.  Pending home sales are up nearly 20% from a year ago. The housing market has been beset with a slew of negative factors including still-tight mortgage conditions and a high supply of homes on the market.

While this week's focus has been on the debt debate on Capitol Hill, several companies are posting earnings this week.

ExxonMobil (NYSE:XOM) unveiled profits of $2.18 per share, missing the Wall Street's view of $2.33.  The largest U.S. company by market capitalization posted revenue of $125 billion, beating estimates of $121 billion.

DuPont (NYSE:DD) posted earnings excluding one-time costs of $1.37 a share, topping analysts' forecast of $1.34 a share on strong growth across several of its product lines.  The chemical giant also boosted its full-year 2011 profit forecast to a range of $3.90 to $4.05 per share, from $3.65 to $3.85.

Energy markets were mixed.

Light, sweet crude climbed 4 cents, or 0.4%, to $97.44 a barrel.  Wholesale RBOB gasoline fell 2 cents, or 0.79%, to $3.12 a gallon.

Prices at the pump continue heading higher.  A gallon of regular costs $3.71 on average nationwide, up from $3.55 last month, and well higher than the $2.75 drivers paid last year, according to the AAA Fuel Gauge report.

In currencies, the euro fell 0.45% against the U.S. dollar, while the greenback gained 0.26% against a basket of world currencies.

Gold has gotten a boost from the uncertain economic and political picture, hitting record highs several times in the last two weeks.  The precious metal fell $1.10, or 0.07%, to $1,616 a troy ounce.  Silver fell 77 cents, or 1.9%, to $39.79 a troy ounce.

Corporate News

Cisco Systems (NASDAQ:CSCO) shares got a boost after Goldman Sachs raised its view to "buy" from "neutral."

Bristol-Myers Squibb (NYSE:BMY) posted profits excluding one-time items of 56 cents a share, which topped estimates by a penny.  The company also reported better-than-expected sales of $5.4 billion, compared with the $5 billion estimate, and raised its full-year profit view.

Foreign Markets

The English FTSE 100 rose 0.28% to 5,873, the French CAC 40 slid 0.57% to 3,713 and the German DAX slumped 0.86% to 7,190.

In Asia, the Japanese Nikkei 225 dropped 1.5% to 9,901 and the Chinese Hang Seng rose 0.13% to 22,570.