Stocks slip for sixth day ahead of debt deadline

Dow Jones: 12,132.49 (–10.75) Nasdaq: 2,744.61 (–11.77) S&P 500: 1,286.94 (–5

Dow Jones: 12,132.49 (–10.75) Nasdaq: 2,744.61 (–11.77) S&P 500: 1,286.94 (–5.34)US STOCKS fell for a sixth day yesterday, while a rally in Treasuries sent 10-year yields to the lowest level since November as weakening manufacturing growth overshadowed progress toward raising the federal debt ceiling.

The Standard and Poor’s 500 lost 0.4 per cent to 1,286.94 in New York, wiping out an early 1.2 per cent gain triggered by optimism lawmakers will approve a plan to raise the US borrowing limit.

The Dollar Index rose 0.5 per cent as the euro slipped 1 per cent to $1.4260 and Italian and Spanish bonds reversed gains amid concern a deteriorating global economy will worsen the European debt crisis.

Equities continued a slump that dragged the SP 500 down 3.9 per cent last week, its worst drop in a year, as the Institute for Supply Management’s (ISM) factory index sank to its lowest level since manufacturing last contracted in July 2009.

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“The ISM figures got people concerned about the third quarter,” Peter Jankovskis, who manages $2.6 billion at Oakbrook Investments in Lisle, Illinois, said.

“That was certainly a negative surprise offsetting the optimism about a final vote on the debt ceiling,” he said.

Health-care stocks led declines among eight of the 10 main SP 500 industries, falling 1.7 per cent as a group.

Medicare, the US health plan for the elderly and disabled, announced an 11.1 per cent rate cut for next year.

Health Care REIT, an investment trust specializing in senior housing and health-care real estate, plunged 8.5 per cent for the biggest loss in the SP 500.

Shares of United Health slid 3.2 per cent to $48.02 while Humana dropped 3 per cent to $72.36, despite Humana reporting a higher-than-expected second-quarter profit. Pfizer shed 1.2 per cent at $19.01.

Merck and Home Depot lost more than 1.9 per cent to lead declines in 21 of 30 stocks in the Dow Jones Industrial Average.

Oil fell 0.9 per cent to a one-month low of $94.89 a barrel in New York, reversing a rally of as much as 3 per cent. Gold futures for December delivery retreated from a record, slipping 0.6 per cent to $1,621.70 an ounce after sinking 1.4 per cent earlier. – (Bloomberg/Reuters)