Stocks Ended with Losses on Debt Uncertainty

U.S. stocks closed lower Thursday after deepening worries that a Congressional gridlock would lead to a U.S. debt default overshadowed some positive economic reports. The Dow Jones Industrial Averagelost 62.44 points, or 0.51%, to 12,240.11. The S&P 500 lost 4.22 points, or 0.32%, to 1,300.67. The Nasdaq Composite ended up 1.46 points, or 0.05%, to 2,766.25.

House Republicans struggled Thursday to pass legislation to prevent a looming government default while slicing nearly $1 trillion from federal spending. Senate Democrats pledged to scuttle the bill — if it got to them — in hopes of forcing a final compromise.

The number of people seeking unemployment benefits dropped last week to the lowest level since early April, a sign the job market may be healing after a recent slump. The Labor Department said Thursday that weekly applications fell 24,000 to a seasonally adjusted 398,000. That’s the first time applications have fallen below 400,000 in 16 weeks.

Oil settled virtually unchanged Thursday. On the New York Mercantile Exchange, benchmark West Texas Intermediate crude rose 4 cents to settle at $97.44 per barrel. In London, Brent crude gave up 7 cents to settle at $117.36 per barrel.

Motorola Mobility Holdings Inc. posted a loss for the latest quarter and forecast earnings for the current quarter well below analyst expectations, sending its shares down. Motorola posted a loss of $56 million, or 19 cents per share, for April through June. That compares with a profit of $80 million a year earlier. Revenue was $3.34 billion, up 28 percent from $2.61 billion a year ago. That beat analyst forecasts for $3.14 billion.

Starbucks Corp. brewed up a hot third quarter, reporting Thursday that its profit rose 34 percent to beat expectations. The company earned $279.1 million, or 36 cents per share, for the quarter that ended July 3. That’s up from $207.9 million, or 27 cents per share, earned in the same quarter last year. Revenue rose 12 percent to $2.93 billion.

Big Oil continued to make big money in the second quarter. Industry giants Exxon Mobil and Royal Dutch Shell on Thursday reported combined net income of more than $18 billion.