US markets slide as government budget battle mounts

US markets slid Friday, giving up much of the gains made on the Federal Reserve's no-taper decision, as the country girded for a disruptive Washington budget and debt showdown. The Dow Jones Industrial Average shed 185.46 points (1.19 percent) at 15,451.09. The broad-based S&P 500 dropped 12.43 (0.72 percent) to 1,709.91, while the tech-rich Nasdaq Composite fell 14.65 (0.39 percent) at 3,774.73. The Dow gave up more than it had added in Wednesday's record-breaking surge after the Federal Reserve announced it would not begin closing its easy money stimulus spigot this month, greeted with surprise and enthusiasm by investors. The S&P 500, which along with the Dow set new record closing highs Wednesday, held on to only a third of its gains. Buying was dulled by comments from Fed official James Bullard that Wednesday's vote was close over reducing the $85 billion a month bond-buying program, and his suggestion that it could still happen next month if economic data improves sufficiently. "It's possible. I'm not saying its going to happen, but it's possible," Bullard said. But a building showdown in Washington over the budget and debt ceiling, which threatens to shut down the government at the end of the month, also cast a shadow on trade. House of Representatives Republicans passed a bill to fund the government but attached a requirement to kill funding for the White House's health-care reforms; the White House has already rejected such a measure. BlackBerry stunned trade with a late announcement that it expected up to a $1 billion loss in its second quarter, and that it would lay off 40 percent of its workforce, or 4,500 jobs.The cellphone maker's shares plunged 17.1 percent to $8.73. Among leading companies, General Electric lost 1.8 percent and IBM 1.7 percent. Volatile Facebook shares picked up 3.3 percent, while Microsoft fell 2.5 percent. Electric sports car maker Tesla surged 3.1 percent to a new closing high, $183.39. Dow member Caterpillar fell 1.4 percent after reporting that its machinery sales fell in the last three months. Prudential Financial dropped 0.6 percent after US regulators classified the company as large enough to present systemic risk, a designation that means tighter regulatory oversight. Darden Restaurants, which operates Red Lobster, Olive Garden and other chains, tumbled 7.1 percent, after earnings of 53 cents per share missed expectations by 17 cents. Bond prices rose. The yield on the 10-year Treasury fell to 2.73 percent from 2.75 percent Thursday, while the 30-year dropped to 3.76 percent from 3.81 percent. Prices and yields move inversely.