NEW YORK (AP) — Stocks are plunging at midday after Congress’ latest bid to resolve the federal budget gridlock appeared to fail.
The Dow Jones industrial average is down 327 points, or 2.8 percent, at 11,469 shortly before noon Eastern. The Standard & Poor’s 500 index is down 31, or 2.5 percent, at 1,185. The Nasdaq composite index is down 67, or 2.6 percent, at 2,506.
A 12-member bipartisan panel was assigned to cut $1.2 trillion from the federal deficit by Wednesday. The panel appeared ready to admit failure on Monday. That could lead to broad, automatic cuts from military and social spending.
Uncertainty about government spending drags on the economy because the private sector is growing so slowly. Traders also fear that Europe’s debt crisis might spill over, disrupting the fragile U.S. recovery.
