Stocks closed lower Tuesday in thin volume as investors continued to worry over the ongoing debt talks in Washington.
The Dow Jones Industrial Average fell 91.50 points, or 0.73 percent, to end at 12,501.30, declining for the third straight session. The Dow has lost more than 1.7 percent in the last three trading days.
3M and GE led the blue-chip laggards, while Hewlett-Packard gained.
The S&P 500 shed 5.49 points, or 0.41 percent, to close at 1,331.94.
The tech-heavy Nasdaq slipped 2.84 points, or 0.10 percent, to finish at 2,839.96.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, gained above 20.
Industrials and materials were the biggest laggards among the key S&P sectors, while techs were higher.
“Earnings and economic data are taking a backseat to headlines again,” said Mark Lehmann, president of JMP Securities. “[The debt talks] are very worry worrisome economically and politically…but it’s going to be less apocalyptic than what some people believe.”
Talks between Democrats and Republicans to resolve the debt impasse were further apart then ever.
After the Aug. 2 deadline, Lehmann expects stocks to continue a “see-saw” pattern through year-end as markets struggle to juggle earnings, IPOs and ongoing weakness in the housing and job fronts.
On the earnings front, Ford Motor finished lower even after the automaker topped earnings estimates, thanks to higher prices and improved sales in North America.
However, 3M tumbled after the Dow component reported higher earnings, but said Japan's March earthquake reduced sales and profit margins. Meanwhile, UPS also fell after the package delivery company only narrowly beat profit estimates.
Meanwhile, AK Steel plunged more than 15 percent after the steelmaker said it expects a sharp decline in profit, due to weakening steel prices and higher material costs. Earlier this week, rival U.S. Steel also said it forecasts lower profit ahead.
And BP reported earnings below expectations. CEO Bob Dudley told CNBC that this year is one in which BP will consolidate and get its strength back.
Amazon.com and Electronic Arts both reported earnings after the closing bell. Amazon posted better-than-expected profit, pushing its stock up sharply in after-hours trading.
Meanwhile, RadioShack soared after the electronics retailer disconnected an unprofitable partnership with T-Mobileand replaced it with Verizon Wireless . Verizon will start providing postpaid and prepaid wireless products and services in more than 4,300 RadioShack stores starting Sept. 15.
Among other techs, a handful of companies raise their price targets on Broadcom and Baidu after both tech firms posted earnings that beat estimates.
Meanwhile, Google gained, marking the Internet giant the best performing S&P stock for the month, up about 23 percent. And Apple rallied to trade at all-time highs.