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New York - US stocks finished lower on Monday as a partial US government shutdown entered its second week with no sign of resolution.
The Dow Jones Industrial Average fell 136.34 (0.90%) to 14,936.24.
The broad-based S&P 500 tumbled 14.38 (0.85%) to 1,676.12, while the tech-rich Nasdaq Composite Index gave up 37.37 (0.98%) at 3,770.38.
The paralysis in Washington continued to weigh on markets. Analysts have expressed particular concern that the fight over the budget will stymie efforts to raise the budget ceiling, resulting in a US default with damaging economic consequences.
However, the market still considers a US default unlikely, said Peter Cardillo, chief market economist at Rockwell Global Capital.
"If the markets were really fearful of a default.... we wouldn't be down a half a percent or three-quarters of a percent," Cardillo said. "We would be down a heck of a lot more."
Banking equities were among the hardest-hit. Dow component JPMorgan Chase fell 1.6%, Citigroup dropped 2.0% and Wells Fargo dipped 1.7%.
Dow component Boeing dropped 0.4% after Japan Airlines announced a massive $9.5bn aircraft order with competitor Airbus. The decision challenged Boeing's dominance in the Japanese market.
Dow component IBM took a 1.1% hit after Barclays downgraded the stock to "equal weight" due to the lack of near-term catalysts for the stock.
Other technology companies also suffered, including Microsoft (down 1.7%), Amazon (down 2.8%), Priceline (down 1.9%) and eBay (down 1.8%).
An exception was Apple, which advanced 1.0% after Jefferies upgraded the stock to "buy" following meetings with Asian suppliers who were enthusiastic about upcoming Apple products.
Cooper Tire & Rubber tumbled 12.8% as doubts rose over the prospects of a $2.5bnon takeover of the company by India's Apollo Tyres. Apollo has sought a reduction in the price of the transaction, but Cooper maintains no cut in price is warranted.
Defence contractor Lockheed Martin rose 0.9% after the company reduced the number of workers sent home without pay to 2 400 from 3 000 following the Pentagon's decision to recall most of its furloughed employees.
Bond prices rose. The yield on the 10-year US Treasury slipped to 2.63% from 2.65% on Friday, while the yield on the 30-year Treasury dropped to 3.70% from 3.73 percent. Prices and yields move inversely.
