U.S. Stocks Tumble As Debt Cap Deadline Looms

@AFP

New York (AFP) – U.S. stocks tumbled in early trade Monday as the government had days to resolve the political deadlock over the budget and debt before being forced to default on its bills.

After a weekend that saw no progress in talks between the White House and Republicans, an hour into trade, the Dow Jones Industrial Average was down 71.70 points (0.47 percent) at 15,165.41.

The broader S&P 500 lost 7.80 (0.46 percent) to 1,695.40, and the Nasdaq Composite gave up 13.15 (0.35 percent) to 3,778.72.

Investors still showed tentative hopes that a deal would be reached by Thursday, the day the U.S. Treasury says it will run out of adequate cash to pay its obligations, including debt service.

Global finance leaders have repeatedly warned that a U.S. debt default would generate unfathomable turmoil through the global financial system.

“It would mean massive disruption the world over,” International Monetary Fund chief Christine Lagarde said Sunday. “And we would be at risk of tipping, yet again, into recession.”

Netflix surged nearly three percent after a report that it was negotiating to place a Netflix app on the set-top boxes of several cable providers.

Chip maker Micron Technology lost another 2.6 percent after Friday’s sharp fall as investors took profits following a sharp runup.

Facebook shed nearly two percent, while retail giant Walmart fell 1.2 percent.

The bond market remained quiet despite the worries about the U.S. budget and debt impasse.

The yield on the 10-year Treasury was marginally higher at 2.69 percent, while the 30-year was at 3.75 percent.

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