The broad indices ended with declines ranging from 0.6% to 0.9% on the 15th day of the partial shutdown of the federal government, as investors continued waiting for an agreement in Washington. No further progress was reported after Senate Majority Leader Harry Reid on Monday said on the Senate floor that he was "very optimistic" he would reach a deal with Senate Minority Leader to Senate Minority Leader Mitch McConnell (R., Ken.) to raise the federal debt limit above $16.7 trillion and resume full government services.
The Republican leadership of the House of Representatives continues to try to come up with its own deal to restart the government, Reid on Tuesday said a House bill would not pass, and was an attempt to "torpedo" the bipartisan effort in the Senate, according to a Wall Street Journal report.
The clock is ticking, but it seems clear the attitude in Washington is that there is plenty of time to get a deal done, at least to raise the debt ceiling, without coming close to a catastrophic government default on debt payments.
U.S. Treasury Secretary Jack Lew has said the government could run out of money to pay its bills by Oct. 17, without an increase to the debt limit, but some analysts have said the government could probably go on operating until the end of October.
KBW Bank Index
was down 1% to 63.37, with all 24 index components ending with declines.
Bank of America
(BAC - Get Report)
is last among the "big four" U.S. banks, being scheduled to announce its third-quarter results early Wednesday.
Analysts polled by
on average estimate the company will post third-quarter earnings of $2.126 billion, or 18 cents a share, compared to 32-cent profit during the second quarter and a break-even third quarter of 2012, when debit valuation adjustments and several one-time items wiped out earnings. The consensus third-quarter revenue estimate is $22.034 billion, compared to $22.727 billion the previous quarter and $20.428 billion a year earlier.
Bank of America's shares on Tuesday were down 0.8% to close at $14.24. The shares have returned 23% this year and trade for 10.6 times the consensus 2014 EPS estimate of $1.35.
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-- Written by Philip van Doorn in Jupiter, Fla.