Stocks were mostly lower Monday as investors waited for news of a possible deal to raise the debt ceiling before Thursday’s deadline.
Stocks started sharply lower after negotiations between the White House and Congressional Republicans broke down over the weekend. The market recovered much of its early loss on news that President Barack Obama will meet with Congressional leaders in both parties later Monday to keep negotiations going over raising the debt ceiling.
The Dow Jones industrial average was down 28 points, or 0.2 percent, at 15,208 as of 12:15 p.m. Eastern. The index fell as much as 100 points in early trading.
The Standard & Poor’s 500 index was down three points, or 0.2 percent, at 1,699. The Nasdaq composite inched up a point to 3,792.
The United States will reach the limit of its borrowing authority on Thursday, according to estimates from the Treasury Department. If the debt ceiling is not raised, investors fear the U.S. could default on its borrowings in the coming weeks.
Stocks rose sharply late last week on news that progress had been made in talks between House Republicans and the White House. President Obama will meet with congressional leaders at the White House at 3 p.m. Eastern.
Investors continue to express hope that a deal can be reached before the debt crisis causes any lasting damage. In the last few years, political deals over major budget disputes have gone on until the very last minute.
“We don’t need some well-crafted, detailed deal,” said Quincy Krosby, market strategist with Prudential Financial. “We just need to buy some time so they can keep negotiating.”
The U.S. government remains partially shut down because House Republicans want to attach conditions to a budget bill that would scale back the country’s new health care law. President Barack Obama is insisting that the government be reopened without strings attached. The partial shutdown is entering its third week.
In one sign of investor worry, gold prices were up $12.50 an ounce, or 1 percent, to $1,280.80 an ounce.
Investors also have a busy week of corporate earnings to work through. Coca-Cola, Johnson & Johnson and Citigroup report their results Tuesday.
Bond trading is closed in observance of Columbus Day.
Among stocks making big moves:
— Netflix rose $16.15, or 5 percent, to $317.00 after The Wall Street Journal reported that the video streaming service is in talks to offer its services to cable companies.
— Merck & Co. fell 68 cents, or 1 percent, to $46.61 after another analyst lowered his rating on the drug developer, which recently announced job cuts and is dealing with the expiration of patents protecting key products.
Oil hovers near $102 as US deadline looms
Oil hovered near $102 a barrel Monday amid alternating hope and uncertainty about the looming deadline for U.S. lawmakers to reach an agreement over the government’s borrowing limit and shutdown.
Benchmark crude for November delivery was up 35 cents to $102.37 a barrel in midday trading in New York. The contract traded below $102 for much of the morning but rose along with the U.S. stock market around midday.
Brent crude, the benchmark used to price international crudes used by many U.S. refineries, was down $1.03 to $110.25 per barrel.
The price of oil “continues to gyrate around speculation and rumor regarding the shutdown of the U.S. government,” wrote energy analyst Stephen Schork in a report.
The price has swung back and forth for days as lawmakers try to resolve an impasse that left the government partially closed and the markets worried about the U.S. defaulting on its debt for the first time.
U.S. retail gasoline prices continued to slip slightly, but a six-week-long decline started to slow. The national average fell less than a penny Monday to $3.34 per gallon. The average is 20 cents cheaper than it was a month ago, and 45 cents below last year at this time.
Gasoline prices are sliding because supplies are ample and demand is tepid. They haven’t slid further because oil prices remain relatively high, thanks to strong global demand for oil, especially in China.
Some traders expect the price of oil to fall soon, however, because supplies appear to be plentiful. In its latest quarterly oil market report, the International Energy Agency predicted strong growth in non-OPEC supplies of crude oil, easily outpacing demand growth next year. The Paris-based IEA also said Friday that the United States would overtake Russia next year as the largest non-OPEC producer of liquid fuels.
In other energy futures trading on Nymex:
— Wholesale gasoline remained unchanged at $2.67 a gallon.
— Natural gas rose 1 cent to $3.79 per 1,000 cubic feet.
— Heating oil fell less than a penny to $3.03 a gallon.