Investing.com – Wall Street closed lower as investor fears of a government shutdown offset optimism over earnings, erasing intraday gains while a mixed bag of economic data did little to lift sentiment.
The Dow Jones Industrial Average closed lower at 26017.81. The S&P 500 closed 0.16% lower, while the Nasdaq Composite closed at 7296.05, down 0.03%.
Investor uncertainty on whether the government secured enough votes needed to pass a spending bill to avert a government shutdown spooked investors, triggering a retreat in US stocks.
Senate majority leader Mitch McConnell was preparing contingency plans for the growing possibility of a government shutdown, Politico reported, citing two Republican sources.
Other reports suggested that US lawmakers were preparing a stopgap bill that would keep the government running for a few days.
On the economic data front, investors mulled over mixed bag of economic data showing weakness in the housing market while jobless claims fell to their lowest total since 1973.
The U.S. Department of Labor reported Thursday that initial jobless claims fell 41,000 to a seasonally adjusted 220,000 for the week ended Jan. 12.
The Philadelphia Fed’s manufacturing index fell to a reading of 22.2 from the previous month’s 27.9, while U.S. homebuilding fell 8.2% to a seasonally adjusted annual rate of 1.192 million units in December.
In corporate news, Wal-Mart closed sharply higher after Goldman Sachs upgraded its rating on retailer to a buy from neutral, with a price target of $117, citing the retailer's strong strategic position selling consumables to middle-income consumers.
On the corporate earnings front, IBM (NYSE:IBM) reported fourth quarter non-GAAP earnings of $5.18 per share, a penny ahead of the analyst consensus while revenue was $22.5 billion, better than Wall Street expectations of $22.0 billion.
'Bulls and Bears' on Wall Street
The top Dow gainers for the session: UnitedHealth Group Incorporated (NYSE:UNH) rose 2%, Wal-Mart Stores Inc (NYSE:WMT) up 1.6% and Visa Inc (NYSE:V) up 0.9%
General Mills Inc (NYSE:GIS) down 3.3%, Boeing Co (NYSE:BA) down 3.1%, and Merck & Company Inc (NYSE:MRK) down 1.5%, were among the worst Dow performers of the session.