Meanwhile, with the shutdown in its ninth day, President Barack Obama made plans to talk with Republican lawmakers at the White House.
Despite the ongoing bickering, Republicans and Democrats in Congress saw signs of hope as members of both parties floated the possibility of a short-term increase in the debt limit to allow time for broader negotiations on the budget.
"People would rather be sitting on the sidelines when they don't know what to expect—The longer this drags out, the more uncertainty the market faces," said Bell. "You can look at technicals or short-term sentiment, but this is a very new-driven environment and until we get some more clarity from DC, we don't see a ton of volume in this market."
Meanwhile, crude oil prices dropped to close at a 3-month low. Earlier, data from the U.S. Energy Information Administration showed U.S. crude inventories shot up nearly 7 million barrels last week, their largest weekly gain since September 2012.
Hewlett-Packard spiked higher following comments from CEO Meg Whitman at an analyst meeting that revenue would stabilize in the fiscal year 2014 and accelerate in 2015. Additionally, the company is expected to report earnings guidance that exceed current Wall Street expectations, according to presentation slides from the company's meeting.
Among earnings, Costco declined after the warehouse club operator reported a weaker-than-expected gain in quarterly earnings as operating cost gained. Rival Wal-Mart also ticked lower following the report.
Former Dow component Alcoa rallied after the aluminum maker beat quarterly expectations and affirmed its 2013 global aluminum demand growth forecast of 7 percent.
Meanwhile, Yum Brands tumbled after the parent company of KFC and Pizza Hut missed forecasts and said it expects full-year earnings declining at a high-single digit to a low double-digit rate.
Family Dollar posted earnings that edged past expectations, but shares slumped after the discount retailer said it was taking a cautious approach to 2014. And same-store sales were flat in the fourth quarter, missing the company's July forecast for an increase of about 2 percent. Rivals Dollar Tree and Dollar General also ticked lower.
Chevron is scheduled to post its interim earnings report after the market close.
Third-quarter earnings are expected to grow 4.3 percent, while revenue is estimated to gain by 3 percent, according to the latest data from Thomson Reuters.
Men's Wearhouse spiked higher after the clothing retailer rejected rival Jos. A. Bank's unsolicited $2.3 billion takeover bid, saying the offer "significantly undervalues" the company.
The Treasury auctioned $21 billion in 10-year notes a a high yield of 2.657 percent. The bid-to-cover ratio, an indicator of demand, was 2.58. Benchmark 10-year Treasury notes were last down 6/32 in price to yield 2.658 percent.
On the economic front, mortgage applications climbed last week as demand for refinancing outpaced purchases, according to the Mortgage Bankers Association.
Wholesale trade data will not be released on Wednesday, as scheduled, due to the government shutdown.