NEW YORK (AP) -- Investors sold stocks across the board Thursday as a U.S.government shutdown dragged into its third day and the nation inched closer to a critical deadline to raise its borrowing limit.
Stocks opened lower and fell steadily throughout the morning.The Dow Jones industrial average slumped nearly 200 points, but later pulled back from its slide.
Investors fretted that Republicans and Democrats were no closer to ending the budget impasse. In a speech, President Barack Obama said there was only one way out of the shutdown: "Congress has to pass a budget that funds our government with no partisan strings attached."
Investors also got some disappointing economic news: The Institute of Supply Management said that sales fell sharply, new orders dipped and hiring weakened at U.S. service companies. The report covers industries including retail, construction, health care and financial services. The stock market losses on Thursday marked an acceleration of gradual declines from the last few weeks. Stocks have fallen nine of the last 11 days as investors grow nervous about the political crisis in Washington and the hit to the economy if it continues.
Republicans in the House of Representatives, pushed by a core of tea party conservatives, are insisting that Obama accept changes to the health care law he pushed through three years ago as part of a budget bill. Obama refuses to consider any deal linking the health care law to routine legislation needed to extend government funding.
The U.S. Treasury Department said Thursday that the economy could plunge into a downturn even worse than the Great Recession if Congress failed to raise the debt ceiling.