Stocks fall on government shutdown worries


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(AP) - The stock market fell Friday as investors focused on the risk of a U.S. government shutdown next week.

The uncertainty has pushed stocks lower all week. Unless the market turns around, Friday would be the sixth trading day of the past seven with declines for the Standard & Poor's 500 index and Dow Jones industrial average.

Still, the indexes are off only about 1 percent for the week, and the S&P 500 is just 2 percent below its record high set Sept. 18.

The Dow fell 71 points, or 0.5 percent, to 15,257 as of 1:54 p.m. Eastern Time. The S&P 500 index fell seven points, or 0.4 percent, to 1,691. The Nasdaq composite was down three points, or 0.1 percent, slightly at 3,783.

Two financial deadlines loom for the U.S. government. Congress needs to pass a funding bill to keep the federal government operating after Oct. 1, when its new fiscal year starts. And the government is expected to reach its debt ceiling around Oct. 17.

Investors are also dealing with mixed economic signals.

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.

A University of Michigan survey showed that consumer confidence declined this month as Americans worried about the possible government shutdown and their own finances. The survey found that half of households expect no pay increase in the coming year.

The Federal Reserve's view last week that the economy is still weak is scaring people, said Frank Fantozzi, CEO of Planned Financial Services.

"If you keep saying things are bad, even if things are good, people are going to believe they're bad, and they're going to act accordingly," he said.

Eight out of 10 industry groups in the S&P 500 index fell, led by telecommunications stocks. Health care and consumer discretionary stocks had small gains.

Among big stock movers:

J.C. Penney Co. shares slid $1.14 cents, or 11 percent, to $9.28 after the struggling retailer said it would raise about $811 million through a stock offering. The stock is down because investors are anticipating that their stake in the company will shrink after the pool of shares grows.

United Continental Holdings Inc. fell $2.79, or 8 percent, to $31.29 after it projected third-quarter revenue below Wall Street's expectations.

Lumber Liquidators dropped $7.86, or 7 percent, to $105.10 after disclosing that federal authorities searched its corporate offices in an action related to imports of some wood flooring products.

Nike shares jumped $3.51, or 5 percent, to $73.85 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 2.61 percent, from 2.64 percent on Thursday.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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