NEW YORK (AP) — Stocks turned lower late Thursday as the House of Representatives prepared to vote on a bill to avoid a U.S. debt default.
The market was up for much of the day but started to sink in the last half-hour of trading. The Dow Jones industrial average fell 68 points, or 0.6 percent, to 12,234 in the late afternoon.
The index had been up as many 82 points earlier in the day following an unexpected decrease in new claims for unemployment benefits. The Dow has fallen over the previous four days over worries that the U.S. might default on its debt as soon as next week if Congress doesn’t raise the country’s borrowing limit.
The Standard & Poor’s 500 fell 4, or 0.3 percent, to 1,300. The Nasdaq composite index edged up 1 to 2,766.
The House of Representatives is expected to vote later Thursday on a new plan to avoid a default. Speaker John Boehner pleaded with fellow Republicans to support the proposal, which calls for cutting $900 billion from the deficit over the next decade.
The bill still faces opposition from Senate Democrats and the White House, but the vote could bring President Barack Obama and Congress a step closer to resolving the standoff. The Treasury Department says the government won’t have enough money to cover all its bills after next Tuesday.
Even if the U.S. doesn’t default, investors worry that the country might lose its triple-A credit rating. That could raise interest rates and possibly slow down the U.S. economy, which is still recovering from the worst recession in decades.
“We’re running out of time,” said Phil Dow, director of equity strategy at RBC Wealth Management in Minneapolis. “It’s getting scary.”
Markets were far less volatile than Wednesday, when the Dow had its biggest one-day drop since early June.
One reason for the early optimism: The government said first-time applications for unemployment benefits fell to 398,000 last week, the lowest level in four months. That’s a sign that employers are laying off fewer workers.
The price of gold, which tends to rise when investors are fearful of economic disruptions, fell $1.70 to $1,613.40 an ounce. It’s still up 13.4 percent this year. The dollar rose against other currencies, as did Treasury prices. The dollar and Treasurys would likely fall if investors were worries that a default was imminent.
Utility and telecommunications stocks fell the most in the S&P 500 index. That suggested investors were becoming more comfortable taking on risk since those stocks tend to be less volatile than the rest of the market.
Technology stocks rose. LSI Corp., which makes storage and networking chips, forecast revenues that were higher than investors were expecting. Its stock gained 13.7 percent, the most in the S&P 500.
Bristol-Myers Squibb Co. rose 2.2 percent after the drugmaker reported earnings that were better than analysts anticipated. The company also raised its earnings forecast for 2011. Exxon Mobil Corp. fell 1.8 percent, the most of the 30 companies that make up the Dow average, after its earnings came in below analysts’ estimates.
Other earnings results were mixed. DuPont Co. rose 0.8 percent after the chemical maker said its earnings increased 5 percent on higher revenue. The company also raised its earnings outlook for the year.
Akamai Technologies Inc. fell 19.1 percent, the most in the S&P 500 index, after the online streaming company’s earnings were lower than analysts had expected. Sprint Nextel Corp. fell 15.9 percent. The nation’s No. 3 wireless carrier said its loss widened in the second quarter, partly because of a tax expense and investment losses.