Stocks on Wall Street ticked lower Monday as traders digested the recent decision by ratings agency Moody’s to cut the US debt rating outlook citing large debts and political gridlock.
On Friday, Moody’s downgraded its outlook on US debt to “negative” from “stable,” ahead of crucial budget negotiations in Congress to avert a government shutdown on November 17.
“Moody’s expects that the US’s fiscal deficits will remain very large, significantly weakening debt affordability,” the agency said in a statement.
It is the only major agency to maintain its rating for US sovereign debt at its highest level.
Around 10 minutes into trading, the Dow Jones Industrial Average slipped 0.2 percent to 34,228.81.
The broad-based S&P 500 Index dropped 0.4 percent to 4,396.39, while the tech-heavy Nasdaq Composite Index was down 0.6 percent at 13,715.54.
“There is ongoing tension in Congress between, and within, the parties,” Briefing.com’s Patrick O’Hare wrote in a note to clients.
“That tension could be on display this week, as Congress needs to agree to a continuing resolution to keep the government funded past November 17 or risk a shutdown,” he added.
Among individual companies, Boeing stocks were up around 4.4 percent after Bloomberg News reported that China was due to stop a freeze on the sale of some jets ahead of a meeting between the US and Chinese presidents later this week.
And project management company Monday.com saw its share price surge more than 11 percent after beating earnings estimates.