NEW YORK, Oct. 8 (Xinhua) -- U.S. stocks took a pounding Tuesday after Monday's slump, with major stock indices dropping to one-month lows, as market confidence was eroded by the ongoing budget standoff in Washington.
The Dow Jones Industrial Average dropped 159.71 points, or 1.07 percent, to 14,776.53 points. The Standard & Poor's 500-stock Index plunged 20.67 points, or 1.23 percent, to 1,655.45 points. The Nasdaq Composite Index plummeted 75.55 points, or 2.00 percent, to 3,694.83 points.
U.S. House Republicans continued to call for budget negotiations with Democrats on a funding bill and debt ceiling. " There's nothing on the table, and there's nothing off the table," House Speaker John Boehner said on Tuesday morning.
U.S. President Barack Obama said on Tuesday afternoon that, "My suggestion to the Speaker has been and will continue to be: let's stop the excuses."
With a partial U.S. government shutdown in its second week and only nine days left for Congress to raise U.S. debt ceiling before the Oct. 17 deadline, markets were showing growing signs of jitters.
Despite growing markets concerns over a possible U.S. debt default, Moody's Investors Service emphasized that there is no direct connection between the debt limit and a default.
The leading global credit rater said in its credit outlook released Monday that "We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact."
Meanwhile, the third-quarter earnings season unofficially kicked off with earnings report from aluminum giant Alcoa after the closing bell. The former Dow component beat market expectations in both its earnings and revenues in the third quarter.
Third-quarter earnings of S&P 500 companies are estimated to grow at 3.0 percent year on year, while revenue growth is forecast to be 2.6 percent, according to FactSet data.
The tech-rich Nasdaq underperformed the other two indices, dragged by several social media, including Facebook, Yelp and LinkedIn, whose shares took a big hit.
The CBOE Volatility Index, widely considered as a fear gauge of the market, jumped 4.79 percent to end at 20.34.
In other markets, oil prices rebounded. Light, sweet crude for November delivery increased 0.46 dollar to settle at 103.49 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery gained 0.48 dollar to close at 110.16 dollars a barrel.
The U.S. dollar edged up against major currencies but still remained near eight-month low as the market is nervous about the potential impact if the United States fails to raise the debt ceiling.
In late New York trading, the euro slipped to 1.3566 dollars from 1.3577 dollars of the previous session, and the dollar bought 96.98 Japanese yen, higher than 96.91 yen of the previous session.
Gold futures for December delivery on the COMEX division of the New York Mercantile Exchange fell 0.5 dollar to settle at 1,324.6 dollars per ounce after a soar in the previous trading session.