US stocks have moved lower as Washington appeared headed for sharp mandatory spending cuts that could slow the economy in the wake of failed budget talks in Washington.
An hour into trade on Friday, the Dow Jones Industrial Average was down 34.98 points (0.25 per cent) to 14,019.51.
The broad-based S&P 500 declined by 4.87 points (0.32 per cent) to 1509.81, while the tech-rich Nasdaq Composite lost 18.54 (0.59 per cent) to 3141.65.
US markets are bracing for $US85 billion ($A83 billion) in spending cuts after President Obama and congressional Republicans failed to compromise on a less austere deficit reduction program.
Markets were also impacted by the rise in unemployment in the 17-nation eurozone to 11.9 per cent in January, according to Briefing.com.
“It is a reminder that fiscal austerity bites, particularly when it is paired with tax increases,” said Briefing economist Patrick O’Hare.
Best Buy gained 1.4 per cent after it topped earnings expectations by a wide share, even as it reported a decline in same-store sales.
The market brushed off projections that first quarter earnings were “under significant pressure,” as the company put it.
Clothing retailer Gap climbed 3.0 per cent after reporting profits and revenues above forecast levels. The company’s chief executive said its goals for 2014 include “leveraging our global brands to gain more market share.” Gap also boosted its dividend.
Deckers Outdoor, which sells the popular UGG and Teva brands of shoes, soared 12.6 per cent after announcing record annual revenues. The company footwear, anticipates full-year revenues jumping seven per cent next year.
American International Group, or AIG, fell 0.2 per cent after the insurer was downgraded by Evercore Partners.
Bond prices rose. The 10-year Treasury bond declined to 1.85 per cent from 1.89 per cent late Thursday, while the 30-year retreated to 3.05 per cent from 3.09 per cent. Bond prices and yields move inversely.
