Wall Street Drops on Debt Limit Concerns

NEW YORK, Jul. 21 -- U.S. stocks slipped and ended lower on Wednesday after a morning rally as U.S. debt limit issue outweighed strong earnings from Apple.

Wednesday's drop came after the Dow jumped 202 points, its best day this year and the Nasdaq surged over 2 percent, the best performance in months.

Investors'concerns overshadowed the best performances from those blue-chips.

The market opened higher in the morning section as Wall Street was encouraged by the blowout of Apple Inc.'s quarterly earnings reported late Tuesday.

Apple posted late Tuesday its third-quarter revenue, far above expectations. The company's second-quarter results were driven by strong sales of the iPhone and expending Asian business. The technology giant also estimated its earnings for the September quarter of 5.50 dollars a share on revenue of 25 billion dollars, below market's estimate of 6.45 dollars a share on revenue of 27.7 billion dollars.

However, the U.S. congressional leaders were still focusing on a plan to raise the nation's debt limit before an Aug. 2 deadline.

Investors became pessimistic about a U.S. debt deal in the near term as the Democrats and Republicans were not willing to make further compromise. Concerns about debt problems on both sides of Atlantic continued weighed on the markets.

In Europe, officials of France and Germany will meet later Wednesday in an effort to reach agreement on a financial bailout package for Greece.

On economic front, according to the National Association of Realtors, the U.S. existing home sales failed to pick up in June, slipping 0.8 percent compared with that in May to a seven-month low of 4.77 million.

Analysts had been expecting an increase for June. The reading was just another disappointing reason for investors to sell off their stocks. The Dow Jones industrial average lost 15.51 points, or 0.12 percent, to 12,571.91. The Standard & Poor's 500 was down 0.89 points, or 0.07 percent, to 1,325.84. The Nasdaq Composite Index dropped 12.29 points, or 0.43 percent, to 2,814.23.