Stocks Fall On Debt Limit Worries

AP Business Writer

Stocks fell on Friday as investors focused on the risk that the U.S. government could shut down next week.

Also on Friday, a government report showed that incomes and consumer spending grew slightly last month. The increases suggest anemic growth that is not strong enough to accelerate the economic recovery.

The Dow Jones industrial average fell 82 points, or 0.5 percent, to 15,245 as of 11 a.m. Eastern Time Friday. The Standard & Poor's 500 index fell seven points to 1,691. The Nasdaq composite fell four points to 3,783.

Unless stock prices turn around, Friday would be the sixth trading day of the past seven with declines for the S&P 500 and Dow.

Two financial deadlines loom for the U.S. government. Congress needs to pass a funding bill to keep the government operating after Oct. 1, when the federal government's new fiscal year starts. There is also the issue of the nation's debt ceiling, which needs to be raised before Oct. 17

All 10 industry groups in the S&P 500 index fell. Telecommunications stocks had the biggest declines.

J.C. Penney Co. said it expects to raise about $811 million through a stock offering. Its stock slid 95 cents, or 9 percent, to $9.48 as investors anticipated that their stake in the company would shrink after the company's pool of shares grows.

United Continental Holdings Inc. slid because its projected third-quarter revenue is coming in below Wall Street's expectations. The airline's stock fell $2.20, or 6 percent, to $31.89.

Nike shares jumped $3.90, or 6 percent, to $74.21 after the shoe and apparel company reported a quarterly profit that was higher than financial analysts expected.

The yield on the 10-year Treasury fell to 2.62 percent, from 2.64 percent on Thursday.

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