A sign for Wall Street is seen just outside the New York Stock Exchange.(Photo: Timothy A. Clary, AFP/Getty Images)
NEW YORK (AP) - The ups and downs well known to stock traders seemed mild compared to the political machinations in Washington yesterday as investors retreated. There was growing pessimism among investors about prospects for a resolution to a political stalemate in Congress that has brought a government default even closer to reality.
Stocks were flat or down all day, but the size of the losses waxed and waned depending on which politician was giving a news conference. The market closed with its first loss in a week, with the Dow Jones industrials down 133 points. Yields on short-term government debt rose sharply as investors worried about the possibility of a default.
Indexes were down only slightly early Tuesday, when Republican and Democratic leaders in the Senate reported that a deal over increasing the nation's borrowing limit appeared to be getting closer. But after House Republicans came up with their own competing plan later in the day, and it was rejected by Democrats, stocks fell further.