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Stocks down; investors leery of budget fight

A Wall Street sign is seen at an

A Wall Street sign is seen at an entrance to the New York Stock Exchange. The U.S. housing market will be in focus the week of Sept. 23, 2013, with Standard & Poor's/Case-Shiller home price index being released Tuesday, along with earnings from major builders. (May 11, 2007) Credit: AP

Concerns about the strength of the economy and the potential for a budget fight in Washington pushed the stock market down Monday.

The Dow Jones industrial average and the Standard & Poor's 500 index fell for a third straight day.

Investors initially cheered the Federal Reserve's decision last Wednesday to keep its huge economic stimulus program in place. But they've since focused on the central bank's gloomier outlook for growth.

William Dudley, president of the Fed's New York branch, said Monday that while the economy was improving, "the headwinds" created by the financial crisis were only easing slowly.

"At first blush [the stimulus] looks positive," said Kate Warne, an investment strategist at Edward Jones, a financial adviser. "But at second blush, it says conditions weren't as strong as we were previously thinking. Markets are now responding to that."

The Dow jumped 147 points last Wednesday to close at an all-time high. But the gain from that rally has been erased.

Monday, the S&P 500 index dropped 0.47 percent to close at 1,701.84. The Dow fell 49.71 points to 15,401.38. The Nasdaq composite fell 0.25 percent to 3,765.29. -- AP

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