A White House threat to veto legislation that would avert a debt default pushed stocks lower Tuesday.
Major indexes were already down for the day when the White House said it would object to a Republican plan in the House of Representatives that calls for raising the debt limit by $1 trillion. The plan would require the debt issue to be voted on again next year, something President Barack Obama does not want.
The stalemate over raising the country's borrowing limit has rattled investors. If an agreement is not reached by Aug. 2, the U.S. won't have enough cash to pay all its bills and could default on its debt. Analysts say a U.S. default would have a devastating effect on financial markets.
The Dow Jones industrial average fell 91.50 points, or 0.7 percent, to 12,501.30.
The Standard & Poor's 500 index fell 5.49 points, or 0.4 percent, to 1,331.94.
The Nasdaq composite index fell 2.84, or 0.1 percent, to 2,839.96.
For the week:
The Dow is down 179.86 points, or 1.4 percent.
The S&P 500 is down 13.08, or 1 percent.
The Nasdaq is down 18.87, or 0.7 percent.
For the year to date:
The Dow is up 923.79, or 8 percent.
The S&P is up 74.30, or 5.9 percent.
The Nasdaq is up 187.09, or 7.1 percent.