Investors worried on Friday that Washington's money fights will bring more volatility in the days ahead, and that sent stocks lower.
Major indexes were mixed in morning trading, but turned lower around midday after the U.S. House of Representatives voted to defund President Barack Obama's health care law.
The vote itself wasn't a surprise, but it was a reminder for investors that the Republican-led House and the Democratic-controlled Senate are poised for a showdown over federal spending.
The debt ceiling must be raised by Oct. 1 to avoid a government shutdown, and a potential default on payments, including debt, later in the month.
Stocks have rallied in September as worries about a conflict with Syria have faded. The Standard & Poor's 500 index is up 5 percent. If that holds, it would be the index's best monthly performance since January. Even with Friday's declines, stocks are near all-time highs set earlier this week.
"Geopolitics in the Middle East is much lower on the list. It's not off the list" of investor worries, said David Darst, chief investment strategist for Morgan Stanley Wealth Management. "No. 1 becomes the debt ceiling and the federal spending debate."
In early afternoon trading, the Dow Jones industrial average was down 70 points, or 0.5 percent, to 15,556. The S&P 500 index fell seven points, or 0.4 percent, to 1,714. The Nasdaq composite fell four points, or 0.1 percent, to 3,785.
Health care was the only industry to rise among the 10 groups in the S&P 500. Industrial companies, tech stocks, and makers of consumer goods saw the biggest declines.
Darden, the struggling parent of Olive Garden and Red Lobster, fell $2.75, or 5.6 percent, to $46.55 after posting a much lower quarterly profit and saying its president and chief operating officer will retire. Sales fell at its two flagship restaurant chains despite efforts to renew menus and advertising.
Goodyear Tire & Rubber rose 25 cents, or 1 percent, to $22.47 as it reinstated a dividend after a hiatus of more than a decade. It also said it would buy back up to $100 million of its shares.
Most overseas markets moved slightly lower, with small declines in the German DAX ahead of Sunday's election.
The price of oil fell 65 cents to $105.21 a barrel.
The dollar rose slightly to 1.35 euros and 99.40 Japanese yen.
The yield on the 10-year Treasury note fell to 2.73 percent, from 2.76 percent on Thursday.