Stocks tumble as "super committee" signals failure
Two hours into the U.S. trading day, the Dow Jones industrial average was at a five-week low of 11,491.04, down 305.12 points, or 2.6%. The broader Standard & Poor's 500 index was down 2.3% on the heels of its worst week in two months.
The "super committee" is expected to announce later Monday that it failed to come up with $1.2 trillion in cuts to the deficit. Committee members are reportedly still negotiating, but if those last-minute talks prove fruitless, the lack of a deal will trigger automatic cuts to domestic programs as well as defense spending.
For the financial markets, a failure by the committee would underscore an inability of leaders in Washington to act decisively.
In Europe, a number of stock markets sank more than 3% on the U.S. political gridlock as well as a warning by Moody's that it may downgrade French government bonds.
Also depressing share prices around the world were pessimistic comments by German and Chinese officials about their economies.
— Nathaniel Popper
Photo: An intersection on Wall Street. Credit: Stan Honda / Getty Images