U.S. stocks were poised for the longest slump of the year as Wal-Mart Stores Inc. slid after telling suppliers it was cutting orders. Commodities halted a four-day slump, while Treasuries rose as investors watched budget negotiations in Washington.
The Standard & Poor’s 500 Index (CME:SPZ13) lost 0.2% to 1,694.62 at 1:36 p.m. in New York for a fifth straight decline, while the Stoxx Europe 600 Index closed little changed. The S&P GSCI Index of 24 raw materials advanced 0.3% as wheat, corn, silver and gold jumped more than 1% to lead gains. Benchmark 10-year Treasury (CBOT:ZNZ13) yields fell 2.5 basis point to 2.63%, the lowest level in six weeks. Japan’s currency rose against 12 of its 16 major counterparts after earlier strengthening versus all 16.
Treasury Secretary Jacob J. Lew said yesterday that confidence that a deal can be struck to raise the U.S. debt limit is “a bit greater than it should be.” Commerce Department data showed orders for durable goods rose 0.1% in August after plunging 8.1% in July and purchases of new homes climbed 7.9% to a 421,000 annualized pace. A Bloomberg National Poll showed Americans are losing faith in the economic recovery.
“While it’s likely that the U.S. will reach a budget deal in the end, the uncertainty surrounding it in the meantime has fueled risk aversion,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London.
The U.S. Senate unanimously advanced a stopgap spending measure after Republican Ted Cruz defied party leaders by staging an extended speech that lasted more than 21 hours. Before sending the measure back to the House, Senate Democrats plan to strip language from the House measure that would choke off funding for the 2010 health-care law.
Unless an agreement is reached to expedite Senate consideration of the measure, a vote on passage could occur as late as Sept. 29. That would give the House just one full workday to act before spending authority expires.
Lew, who spoke at the Bloomberg Markets 50 Summit in New York yesterday, said the government probably will have less than $50 billion in cash by mid-October. Twenty-seven% of poll respondents anticipate improvement in the U.S. economy’s strength over the next year, down from 39% in the last survey in June, according to a Bloomberg National Poll.
The S&P 500 retreated 1.6% over the previous four sessions.