Mounting Fiscal Woes Hit Wall Street

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The Dow and S&P 500 landed in the red for the fifth session in a row as a burgeoning fiscal battle in Congress dented sentiment.

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Today's Markets

The Dow Jones Industrial Average fell 61 points, or 0.4%, to 15274, the S&P 500 declined 4.6 points, or 0.27%, to 1693, and the Nasdaq Composite slumped 7.2 points, or 0.19%, to 3761.

A new battle is brewing in Washington, D.C. -- and Wall Street isn't a fan. The Senate cleared a hurdle that will allow it to consider a House-passed bill to stave off a government shutdown. However, analysts said it would be highly unlikely for the bill to pass as is since it would also defund the Affordable Care Act -- President Barack Obama's signature health-care law. Instead, the Democratic-controlled Senate is likely to punt a different version of the bill back to the Republican House of Representatives.

"There appears to be little scope for an imminent tempering of fiscal uncertainty," analysts at Nomura told clients.

The Japan-based investment bank highlighted the duo of issues the legislature needs to tackle: passing a continuing resolution to keep the government's lights on until December and avoiding a breach of the debt ceiling. Indeed, Treasury Secretary Jack Lew told House Speaker John Boehner the U.S. will slam into the debt limit on October 17.

On the corporate front, Wal-Mart (NYSE:WMT) was said to be cutting back on orders with suppliers as inventory levels swelled, according to a report from Bloomberg News. The world's biggest retailer pushed back, with a spokesperson telling FOX Business, it  has "no issues with our inventory levels" and that the Bloomberg report is "widely inaccurate."

J.P. Morgan Chase (NYSE:JPM) the biggest U.S. bank is in talks to pay $11 billion to settle a probe into its mortgage practices, according to several media reports.

Goods, Housing Data in Focus

Meanwhile, traders also mulled a round of economic data in a bid to determine when exactly the Federal Reserve will begin scaling back its vast asset-buying program.

Since the central bank has said its moves will be "data dependent," incoming economic data have taken on increased significance.

The Commerce Department reported orders for long-lasting goods ticked slightly higher in August. Excluding the transportation component, orders slid 0.1%. Economists expected durable goods orders to have slipped 0.4% in August from July as big-ticket transportation orders came under pressure.

The gauge is a lagging indicator, but it can affect investment banks' forecasts for second and third quarter gross domestic product.

A separate report from Commerce said sales of new single-family homes jumped to an annualized rate of 421,000 units in August from 390,000 units the month prior. Economists expected sales to rise to 420,000.

The housing market has been a bright spot in the economic recovery. However, Robert Shiller, an economist at Yale University, told FOX Business Tuesday the "scary" jump in rates this year could stall the progress.

Elsewhere, U.S. crude oil futures slipped 47 cents, or 0.46%, to $102.66 a barrel. Wholesale New York Harbor gasoline advanced 0.38% to $2.657 a gallon. Gold rallied $19.90, or 0.38%, to $1,336 a troy ounce.

Foreign Markets

The Euro Stoxx 50 dipped 0.2% to 2917, the English FTSE 100 slipped 0.35% to 6549 and the German DAX slumped 0.24% to 8643.

In Asia, the Japanese Nikkei 225 skidded 0.76% to 14621 and the Chinese Hang Seng rose 0.13% to 23210.

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