Debt drama and weak US economic growth keep market volatile and led to short-term bond sell-off. The Dow Jones industrial average fell nearly 100 point that was its sixth straight decline, as the United States edged closer to a Tuesday deadline for raising the country's borrowing limit or risk the prospect of a debt default. A dismal U.S. economic growth report this spring also sent stocks lower and the yield on the 10-year Treasury note to its lowest level of the year.
The Dow Jones industrial average lost 581 points over the past six days, the S&P 500 index had its worst week in a year, and gold rose nearly 1 percent to $1,631 an ounce and all 10 industry groups in the S&P 500 stock index fell.
A spike in short-term Treasury yields offered a clear sign the market was increasingly worried about a default, according to analysts. "It's not panic, but we are pre-positioning in case something goes wrong over the weekend," said Thomas Tzitzouris, head of fixed income research at Strategas Research Partners.
The Dow Jones industrial average fell 96.87 points, or 0.8 percent, to close at 12,143.24. The Standard and Poor's 500 index lost 8.39 points, or 0.6 percent, to 1,292.28. The Nasdaq composite Index fell 9.87, or 0.4 percent, to 2,756.38.
"It seems unlikely that Congress would choose financial Armageddon over some type of compromise," said Joseph S. Tanious, a market strategist with J.P. Morgan Asset Management.
"It's a very confusing time, but once this cloud lifts, market participants are going to turn around and say, `This isn't so bad.'," said John Canally, an economist with LPL Financial. "It's definitely going to be a rocky couple of days."