NEW YORK (TheStreet) -- U.S. stocks on Tuesday tumbled the most in six weeks on concerns the government will default on its debt obligations.
The government shutdown, which began Tues. Oct. 1, has forced investors to gauge political sentiment along with economic factors. The near stalemate among political leaders threatens to adversely impact corporate outlooks as the third-quarter earnings season gets underway.
The S&P 500 closed down 1.23% to 1,655.45 to extend its decline since the shutdown began to 1.1%. The Dow Jones Industrial Average slipped 1.1% to 14,776.53 while the Nasdaq lost 2% to 3,694.83.
Alcoa (AA), the largest U.S. aluminum producer, posted profits that beat analyst forecasts. Shares, which closed at $7.94, were rising 2% in after-hours trading.
YUM! Brands (YUM) was tumbling in after-hours trading after the owner of KFC, Pizza Hut and Taco Bell reported earnings that fell short of expectations as same stores sales fell 11% in the quarter ended Sept. 7. Sales from the company's Chinese operations also dropped 11% compared to the same period a year ago.
(MNST) was the largest percentage gainer on the S&P 500 after BMO analyst Amit Sharma said the company known for its energy drinks saw sales rise 10% in September. Shares popped 3.8% to $53.59.
Tripadvisor (TRIP) was the worst performer on the S&P 500 as it led a bevy of tech stocks that sank Tuesday on the back of investor worries that Congress won't reach a debt ceiling deal. Shares lost 5.5% to $71.70.
Tower Group International (TWGP) dropped more than 42% to post its steepest fall since its 2004 public market debut, after the Bermuda-based insurer said that it will have to explore "a range of strategic options" following a goodwill impairment charge of about $215 million and its discovery that it will have to add $365 million to its loss reserves reflecting payouts owed for workers compensation among a host of other liabilities.
Jamba, Inc. (JMBA) sank nearly 19% after the smoothie maker said that less impactful marketing campaigns from the prior year amid a slowdown in consumer spending will reduce third-quarter same-store sales by 3% to 4% and that 2013 same-store sales may show up flat to up 1%.Xerox (XRX) surrendered 2.3% to $10.16 after the office equipment company disclosed that it is being probed by the Securities and Exchange Commission on certain accounting practices at Affiliated Computer Services, a business it bought in February 2010 and is now a part of Xerox's Services unit. IT management company SolarWinds (SWI) shed 1.7% after saying that it will buy privately held Confio Software for $103 million in cash. Major U.S. equity markets on Tuesday entered a second week of the government shutdown by selling off, which was the opposite reaction on the first day of the shutdown last Tuesday when the S&P 500 rose 0.8%.
"I sort of loved the reaction of the stock market the first day the government shut down, which was to go up, but I guess that was too good to last," said Adrian Day, president of Adrian Day Asset Management.
JPMorgan Chase (JPM) and Wells Fargo (WFC) are scheduled to release their quarterly results on Friday. The benchmark 10-year Treasury was falling 3/32, raising the yield to 2.641%. Follow @atwtse -- Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.>
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