NEW YORK -- Stocks pared earlier gains on signs that deficit-reduction negotiations will stretch well into next week and a weak reading on consumer sentiment.
The Dow Jones Industrial Average was up by 5 points, or 0.04%, at 12,442. The S&P 500 was higher by 3 points, or 0.2%, at 1311, and the Nasdaq was ahead by 15 points, or 0.6%, at 2778.
House Republican Leader Eric Cantor said the House of Representatives will vote on a bill to lower deficit and raise the debt ceiling next week, dashing hopes that lawmakers would reach a deal by the weekend. Cantor's comments, made during a morning press conference, came the morning after Standard & Poor's upped the pressure on Washington by warning that it could cut its rating on U.S. government debt before the U.S. actually defaults on some of its financial obligations. The U.S. Treasury has estimated that the government has until Aug. 2 before it faces default.
Even if the Republican-majority House passes a bill next week, it is likely to die in the Democrat-led Senate.
President Barack Obama will hold a press conference at 11 a.m.
Stocks began paring earlier gains after consumer sentiment sunk to its lowest level in two years, according to the University of Michigan's preliminary reading. The consumer sentiment index is an important measure since consumers spend more when they feel confident in the economy and strong consumer spending is crucial to a sustainable U.S. economic recovery. The consumer sentiment index fell to 63.8, from June's level of 71.5. Economists had been projecting a milder decline, to a reading of 71.4, according to Briefing.com.
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