Dow Slips Below 15,000 as Shutdown, Debt Ceiling Uncertainty Grows

What started off as a slow decline has picked up the pace.

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The Dow Jones Industrials have dropped 168 points, or 1.1%, to14,962.76 at 12:21 p.m. while the S&P 500 has fallen 1.3%% to 1,671.99. If the Dow’s drop holds, it would be the biggest fall since Sept. 20.

Why the sudden drop? It appears investors, who initially were betting on a grand bargain that resolved the debt ceiling and budget impasse quickly, now believe that the uncertainty will drag on much longer, says Robbert van Batenburg, director of market strategy at Newedge USA. “Neither side is in a conciliatory mood,” he says. “It’s tough for the market to see where this is heading.”

The selling today has being driven by the industrial sector–the Industrial Select Sector SPDR (XLI) has dropped 1.5% to $45.79–and defense stocks are getting hammered. Textron (TXT) has fallen 3% to $26.82, while Northrop Grumman (NOC) has declined 2.5% to $92.82. Not a surprise as reports of government contracts being held up and orders delayed make the rounds.

Just 14 stocks in the S&P 500 have gained today at 12:15 p.m. Tenet Healthcare (THC) has jumped 6.4% to $46.70–Fitch reaffirmed its credit rating yesterday. Intercontinental Exchange (ICE) after it launched a swap-trading platform.