A gauge of stocks whose earnings are most closely tied to economic growth slipped 1%. Hewlett-Packard Co. dropped 1.7% to $21.03.
The S&P Supercomposite Homebuilding Index lost 1.6%, as all 11 members retreated. PulteGroup slumped 2.3% to $16.52 and D.R. Horton Inc. dropped 2% to $19.15.
A Bloomberg index that tracks 70 companies that get at least 3.5% of their revenue from federal contracts fell 1.2% today, extending its decline this week to 7.5%.
United Technologies lost 1% to $103.98. The military contractor said the impasse will force it to lay off as many as 5,000 employees. The first effect will be layoffs for about 2,000 Sikorsky Aircraft employees in Connecticut, Florida and Alabama on Oct. 7, the contractor said yesterday.
UTC receives about 18% of its revenue from the government, Chief Financial Officer Gregory Hayes told analysts this week.
“The comments made by United Technologies will be a good proxy for what to expect,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich. “Most companies will most likely continue to provide very cautious guidance in general, and the shutdown isn’t helping.”
Eli Lilly lost 3.5% to $48.76. The drugmaker said a slowdown in emerging markets and the weakening of the yen will make it “challenging” for it to meet its 2014 sales target.
Lilly also plans to repurchase $5 billion of shares over time, the company said in a statement today. The Indianapolis- based company reaffirmed its goal of generating at least $20 billion in revenue, $3 billion of net income and $4 billion of operating cash flow next year.
Zale Corp. sank 7.1% to $14.64 after the jewelry retailer registered to issue 11.06 million shares related to warrants it sold in 2010. The Wall Street Journal reported that private equity firm Golden Gate Capital Inc. has the right to buy the stock at $2 a share.
PVH Corp. jumped 4% to $122.20. The maker of Calvin Klein and Tommy Hilfiger clothing said yesterday that it plans to sell its G.H. Bass and Co. division to G-III Apparel Group Ltd. for $50 million in cash.
Constellation Brands Inc. added 3% to a record $60. The maker of Svedka Vodka, Black Velvet Canadian Whiskey and Robert Mondavi wines raised its earnings forecast for fiscal 2014 after reporting second-quarter earnings that surpassed analyst expectations.
Delta Air Lines Inc. climbed 0.9% to $24.47, headed toward a record close after rising for the eighth time in nine sessions. Morgan Stanley raised its 2014 and 2015 profit estimates for the carrier and boosted its stock-price target to $35. The firm said Delta is a “win/win play” on the potential merger of U.S. Airways Group Inc. and AMR Corp.’s American Airlines.