NEW YORK (TheStreet) -- Major U.S. stock markets were slipping Tuesday as investors monitor the economic uncertainties spurred by the drawn-out fiscal debates in Washington and attempt to gauge the impact on corporate outlooks as the third-quarter earnings season begins this week.
Still, there is optimism that the impasse over debt-ceiling talks in government will be resolved as Senate Majority Leader Harry Reid prepares to unveil a standalone bill to increase the government's borrowing caps.
Reid's bill would allow the U.S. at least $1 trillion in additional borrowing room beyond the $16.7 trillion debt limit expected to be breached on October 17, providing the government with enough borrowing ability to pay its bills through next year's general elections in November.
The S&P 500 was down 0.37% to 1,669.85, while the Dow Jones Industrial Average was off 0.37% to 14,881.27. The Nasdaq was giving up 0.85% to 3,738.45. "If it gets off the ground, it ends the threat of a debt default for the immediate future," said Peter Cardillo, chief market economist at Rockwell Global Capital in Manhattan, in an emailed comment about Senate's expected move. "We think earnings sentiment remains neutral as the political impasse overshadows for now. However, that's not to say individual companies will not be punished," he added. Tower Group International (TWGP) was dropping 36.3% to $4.74, 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) was sinking 18.63% to $10.95 after the smoothie maker said that less impactful than usual marketing campaigns 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) was surrendering 0.96% to $10.30 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) was shedding 2.21% to $33.70 after saying that it will buy privately held Confio Software for $103 million in cash. Alcoa (AA) will be reporting after the market close, while JPMorgan Chase (JPM) and Wells Fargo (WFC) will be releasing 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 in New York >To contact the writer of this article, click here: Andrea Tse.>
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