US stocks lost ground after volatile trading Tuesday, as investors jittered at the back and forth in the fiscal negotiations in Washington.
The Dow Jones Industrial Average lost 133.25 points, or 0.87 percent, to 15,168.01 points. The Standard & Poor's 500-stock Index dipped 12.08 points, or 0.71 percent, to 1,698.06 points. The Nasdaq Composite Index shed 21.26 points, or 0.56 percent, to 3,794.01 points.
The blue-chip Dow and broader S&P 500 snapped a four-day winning streak as the partial shutdown of the U.S. federal government entered its third week and the debt ceiling deadline is looming, with no deal struck yet.
U.S. House Speaker John Boehner said after a GOP meeting Tuesday morning that there is no decision yet on "what exactly we will do." He nevertheless stressed that the idea of default is wrong, and "we should not come close to it."
Senate Majority Leader Harry Reid immediately expressed his disappointment at the slow progress in Congress, saying that the House proposal to reopen the government and avoid a potential debt default bears no relation to what the Senate has discussed.
Reid warned of a possible downgrade in the U.S. sovereign rating as of Tuesday night, noting "we are putting ourselves on the eve of financial destruction."
Both Reid and Senate Minority Leader Mitch McConnell said Monday they were "optimistic" about reaching an agreement this week after "constructive" talks over the past couple days.
On the economic front, manufacturing activity in the New York region declined in October. The general business conditions index fell 5 points to 1.5, the slowest pace of improvement since May, according to the Federal Reserve Bank of New York's monthly Empire State Manufacturing Survey.
The third earnings report season began, with earnings reports coming out from several notable corporations, which failed to provide direction for the market as it continued to be concerned about the fiscal standoff in Washington.
Citigroup Inc. reported a net income of 3.2 billion U.S. dollars for the third quarter of the year, up from 468 million dollars in the same period last year, and its quarterly revenue was 17.9 billion dollars, up 30 percent year on year. However, the bank's earnings still missed analysts' estimate and its shares went down 1.49 percent to 48.86 dollars.
Shortly after the closing bell, Intel and Yahoo posted their earnings results in the third quarter, both of which beat market expectations.