By Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks fell on Wednesday and the S&P 500 put in a fifth day of losses, its longest losing streak since the end of 2012, on jitters funding for the federal government would run out and after a drop in shares of Wal-Mart Stores.
Investors worried about two looming Washington deadlines: before October 1 Congress needs to pass stop-gap funding for federal agencies and by October 17 it must raise the federal borrowing limit to avoid a debt default by the United States.
The Senate took up the funding measure after Tea-Party-backed Republican Senator Ted Cruz held the bill up with a 21-hour-long attack against Obamacare. A government shutdown could begin with the new fiscal year that begins on October 1 unless funds are authorized.
Shares of Wal-Mart , the world's largest retailer, added to early afternoon losses on the Dow and S&P 500 after a report by Bloomberg News that Wal-Mart was cutting orders to its suppliers for this quarter and next.
The stock retraced some of its losses after the company called the report inaccurate and ended down 1.5 percent at $74.65, among the biggest drags on the S&P 500 and Dow.
"In the short-term, it seems there are reasons emerging why investors should be selling stocks," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.
Chief among them is "uncertainty over what's going to happen with a government shutdown," he said.
The Dow Jones industrial average <.DJI> was down 61.33 points, or 0.40 percent, at 15,273.26. The Standard & Poor's 500 Index <.SPX> was down 4.65 points, or 0.27 percent, at 1,692.77. The Nasdaq Composite Index <.IXIC> was down 7.16 points, or 0.19 percent, at 3,761.10.
Investors also face uncertainty about Federal Reserve policy after the central bank's decision last week to keep its stimulus measures intact.
"We're back to where we were before, which was a slowly grinding higher economy, nothing gangbusters, with plenty of restrictions on growth: fiscal policy, monetary policy, foreign issues and geopolitical issues," said Jordan Waxman, managing director and partner at HighTower's HSW Advisors in New York.
J.C. Penney Co Inc tumbled to a 13-year low of $9.94, after Goldman Sachs said it expects sales at the troubled department store chain to improve more slowly than expected. The stock ended down 15 percent at $10.12 and was the biggest percentage loser on the S&P 500.
Other decliners included Carnival Corp , whose shares fell 5.3 percent to $32.70, after dropping 7.6 percent on Tuesday. The company warned it could report an adjusted loss for the current quarter and several brokerage downgraded its stock.
For the third quarter, earnings estimates have fallen sharply in recent months. Earnings at S&P 500 companies are expected to have risen 4.8 percent from a year ago, in line with second-quarter growth, according to Thomson Reuters data.
In positive territory, Facebook shares rose 2.1 percent to $49.46, moving closer to $50 after brokerage upgrades.
Shares of JPMorgan Chase were up 2.7 percent at $51.70 after media reports said it is in talks with government officials to settle federal and state mortgage probes for $11 billion.
The day's economic data showed orders for long-lasting U.S. manufactured goods barely grew in August in a possible sign that companies are holding back on investment spending. A separate report showed sales of new single-family homes rose in August but held near their lowest levels this year because of higher mortgage rates.
After the bell, shares of contract electronics maker Jabil Circuit declined 5.1 percent to $22.77 after it reported results and issued guidance.
Also after the close, shares of Bed Bath and Beyond rose 3.8 percent to $77.03 following the release of its results.
Volume totaled about 5.9 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.3 billion this year.
Advancers only slightly outpaced decliners on the NYSE, while on the Nasdaq, decliners beat advancers by about 1.1 to 1.
(Editing by Kenneth Barry; Editing by Nick Zieminski and Kenneth Barry)