March 1, 2013 at 10:06 AM ET
Stocks are opening sharply lower on Wall Street with automatic government spending cuts about to kick in.
The Dow Jones industrial average dropped 93 points, or 0.7 percent, to 13,960 shortly after the opening bell Friday.
The Standard & Poor's 500 index fell 11 points, 0.7 percent, to 1,503. The Nasdaq composite fell 29 points, or 0.9 percent, to 3,131.
President Barack Obama has called congressional leaders to the White House to give both sides an opportunity to state their positions, but there is no anticipation of a deal being struck.
Investors were also looking ahead to U.S. government budget cuts that were widely expected to take effect at the end of the day, barring an unlikely last-minute deal. The International Monetary Fund has said that if the cuts take effect, it would re-evaluate growth forecasts for the U.S. and the global economy.
Adding to concerns about U.S. growth was data showing that January personal income fell 3.6 percent, its biggest drop in 20 years.
Overseas, China's factory growth cooled to multi-month lows in February as domestic demand dipped, and euro zone manufacturing activity appeared no closer to recovery last month, as a dire performance in France offset a return to growth in Germany.
"The weakness overseas really spooked things, and that's what's directing the ball right now," said Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia, who helps oversee $115 billion in assets.
"There are also jitters, with the Dow at the doorstep of all-time highs. Given the speed of the advance we've seen, there's plenty of room for a pullback."
Equities have been on a tear lately, rising for four straight months to approach five-year highs while the Dow is now about 1 percent away from its all-time intraday high of 14,198.10. Any declines have been shallow or short-lived, with investors jumping in to seek value on any dips.
The gains have come on the back of strong corporate earnings and an accommodative Federal Reserve. In that environment, many investors have shrugged off the potential impact of the sequester, $85 billion in spending cuts across federal government agencies that economists expect will shave half a percentage point off U.S. economic growth.
For the week, the Dow is up 0.4 percent while both the S&P and Nasdaq are down less than 0.1 percent. Both the Dow and S&P climbed more than 1 percent in February, slimmer gains than in January as equities grappled with uncertainties in Europe and Federal Reserve policy.
The Associated Press and Reuters contributed to this report.