Investing.com -- U.S. stocks reversed earlier gains and turned lower on reports negotiators had hit pause on talks to reach an agreement on raising the debt ceiling.
At 13:56 ET (17:56 GMT), the Dow Jones Industrial Average was down 124 points or 0.4%, while the S&P 500 was down 0.2% and the NASDAQ Composite was down 0.3%.
Expectations were rising that a deal to raise the debt ceiling to avoid default would be reached over the weekend, but that changed mid-morning on reports lawmakers in the room had put the talks on hold. President Joe Biden, who is in Japan for the Group of Seven summit of world leaders, is expected to return home on Sunday and hold a press conference to update on the progress of the talks.
Biden administration officials have said the U.S. has, until early June, possibly as early as June 1, to get a deal done before it runs out of options to continue paying its obligations.
Federal Reserve Chair Jerome Powell participated on a panel with former Fed Chair Ben Bernanke at a conference in Washington. During the discussion, Powell said interest rates might not have to rise as high as expected because the turmoil in the banking sector was reining in the availability of credit, which also helps to cool the economy. Powell's appearance caps a week of appearances by Fed officials, whose comments reveal the policymakers are still deciding whether to pause rate hikes in June or continue to tighten as they fight inflation.
The S&P and the Nasdaq are on track for their strongest weekly performance since March as corporate earnings bolster investor risk appetite.
Agricultural equipment maker Deere (NYSE:DE) raised its annual profit forecast as surging farm incomes boost purchases. Shares dipped 2.3%.
Shares of apparel and shoe retailer Foot Locker (NYSE:FL) tumbled 26% after it cut its annual sales and profit forecasts. It saw a steep drop in demand despite big discounts meant to clear inventory.
Investment bank Morgan Stanley (NYSE:MS) shares wobbled after CEO James Gorman announced plans to step down in the next year. Shares fell 2.5%.