U.S. stocks end lower amid debt ceiling uncertainty

NEW YORK, May 16 (Xinhua) -- U.S. stocks ended lower on Tuesday as investors weighed debt ceiling concerns and a disappointing earnings report from Home Depot.

The Dow Jones Industrial Average was down 336.46 points, or 1.01 percent, to 33,012.14. The S&P 500 fell 26.38 points, or 0.64 percent, to 4,109.90. The Nasdaq Composite Index was down 22.16 points, or 0.18 percent, to 12,343.05.

Nine of the 11 primary S&P 500 sectors ended in red, with real estate and energy leading the laggards by losing 2.61 percent and 2.54 percent, respectively. Communication services and technology bucked the trend by rising 0.59 percent and 0.16 percent, respectively.

U.S. President Joe Biden met with top congressional leaders for the second round of debt ceiling negotiations Tuesday afternoon.

House Speaker Kevin McCarthy told reporters that it was still possible to have a deal by the end of the week to raise the borrowing limit and avoid an economic catastrophe as early as June 1.

The White House said Tuesday that Biden would cut his upcoming international trip short, given the debt ceiling standoff.

The precarious debt ceiling stalemate in Washington has increasingly drawn investor's attention. To date, U.S. lawmakers have failed to agree to increase the debt limit, which has already begun distorting some markets, said a recent note by Principal Asset Management strategists.

"Since both sides know what is at stake, default is improbable. However, every day closer to the Treasury's June 1 deadline without a resolution will likely elevate volatility in markets, trim demand for U.S. risk assets, and even expedite recession," said the note.

Investors also digested data on retail sales and a weak forecast from Home Depot, which cut its outlook after first-quarter sales dropped more than expected, a sign that Americans trim their spending on homes.

The U.S. Census Bureau reported Tuesday that the U.S. retail sales increased by 0.4 percent in April month on month, lower than the forecast consensus of 0.7 percent. The month-on-month decrease in March was revised to -0.7 percent from -1 percent.

Investors are also hearing from some central bankers signaling that they see interest rates staying high or even going higher.

Richmond Federal Reserve President Thomas Barkin said Tuesday that the central bank was still looking to be convinced that inflation is under control and he would support raising the federal funds rate further if needed.

The Federal Reserve has yet to reach a point where interest rates are sufficiently restrictive, Cleveland Federal Reserve President Loretta Mester said.

Meanwhile, New York Fed President John Williams said Tuesday that "it takes a while for our decisions to fully affect the economy," suggesting that he was comfortable with a wait-and-see approach.