Nikolaj Gammeltoft
and Jeff Sutherland
Bloomberg News

NEW YORK: Stocks fell Monday, paring a quarterly gain for the Standard & Poor’s 500 index, in what was perceived as a reaction to a stalemate over the federal budget. All 10 main industries in the S&P 500 retreated.

Procter & Gamble Co. and Coca-?Cola Co. slipped more than 1.5 percent to pace declines among consumer-staples companies. Devon Energy Corp. and Tesoro Corp. lost at least 1.6 percent as energy shares slid 0.8 percent amid a drop in oil prices. J.C. Penney Co. fell 2.7 percent, extending last week’s losses.

The S&P 500 fell 0.6 percent to 1,681.55. The benchmark gauge added 3 percent for the month, giving it a quarterly gain of 4.7 percent. The Dow Jones industrial average lost 128.57 points, or 0.8 percent, to 15,129.67.

In a government shutdown, essential operations and programs with dedicated funding would continue. The Treasury will sell debt, while economic reports from the Commerce Department will be suspended and the Bureau of Labor Statistics will stop operations. Commerce is scheduled to release data this week on construction spending and factory orders before the Labor Department’s closely watched jobs report on Friday.

A shutdown would reduce fourth-quarter economic growth by as much as 1.4 percentage points depending on its duration, according to economists. Three rounds of Fed stimulus and better-?than-forecast corporate earnings have pushed the S&P 500 up 149 percent from a March 2009 low.

In addition to battling over the budget, U.S. lawmakers face another fiscal dispute over raising the $16.7 trillion debt ceiling. The Treasury has said measures to avoid exceeding the limit will be exhausted on Oct. 17.

The debt limit is a bigger problem than a federal shutdown, though the U.S. will probably avoid both, Moody’s Investors Service said in a report Monday.

“It’s a headwind with the government shutdown, but it’s not as meaningful to investors as the debt ceiling,” said Oliver Pursche, co-manager of the GMG Defensive Beta Fund and president of Gary Goldberg Financial Services.

Procter & Gamble slipped 2.1 percent, the most in the Dow, to $75.59 and Coca-Cola retreated 1.4 percent to $37.88. Consumer-staples companies lost 1.1 percent as a group.

Devon Energy slid 1.6 percent to $57.76 and Tesoro retreated 1.7 percent to $43.98. Crude futures dropped 0.5 percent to the lowest level in almost three months.

Apple Inc. declined 1.2 percent to $476.75. The maker of iPhones climbed 3.3 percent last week after reporting record sales of the latest models of the smartphone in their debut weekend.

Johnson Controls Inc. tumbled 2.4 percent to $41.50. The auto-parts maker was cut to underweight from overweight by Morgan Stanley analyst Ravi Shanker, who said expectations may be too high. The shares have rallied 35 percent this year.

J.C. Penney dropped 2.7 percent to $8.81. The department store chain plummeted 30 percent last week as it began a share offering to raise as much as $932 million and lowered its year-end liquidity forecast. J.C. Penney, which hasn’t turned a quarterly profit since mid-2011, is down 55 percent for the year.

Regeneron Pharmaceuticals Inc. jumped 2.4 percent to $312.87 following positive trial data for Eylea as a treatment for diabetic macular edema.