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Stocks sink as US comes closer to a default

Stocks fell again on Wednesday, with the Dow losing 199 points, as lawmakers in Washington remained at odds over a debt solution

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Henny Ray Abrams / AP
In this July 26, 2011 photo, a trader walks on the floor of the New York Stock Exchange, in New York. Global stocks were weighed down again on Wednesday, July 27, by worries that the US could default on its debt or see its credit rating cut as lawmakers in the world's largest economy appear no nearer to agreeing on raising the borrowing limit.
  • By Chip Cutter Associated Press

NEW YORK (AP) — Stocks are closing lower on more signs that the economy is deteriorating and as the U.S. edges closer to defaulting on its debt.

With no sign of a compromise in Washington, investors are becoming more fearful that the U.S. rating could be lowered. That would raise interest rates and slow down the already weak economy.

A Federal Reserve survey said the economy weakened this summer.

The Dow Jones industrial average fell 199 points, or 1.6 percent, to close at 12,303 Wednesday.

The Standard & Poor's 500 fell 27 points, or 2 percent, to 1,305. The Nasdaq composite fell 75 points, or 2.6 percent, to 2,765.

About 11 stocks fell for every one that rose on the New York Stock Exchange. Volume was heavier than usual at 4.6 billion shares.

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