Stocks plunged Wednesday as the U.S. edged closer to defaulting on its debt and the economy showed more signs of deteriorating. Major indexes gave up all of their gains for the month.
Nearly half of the Dow's losses came in the last two hours of trading, after the Federal Reserve released a survey showing that the economy deteriorated in much of the country this summer. The economy slowed in seven of the Fed's 12 regions because of weak home sales and a slowdown in manufacturing.
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.
The Dow Jones industrial average fell 198.75 points, or 1.7 percent, to 12,302.55.
The Standard & Poor's 500 index fell 27.05, or 2 percent, to 1,304.89.
The Nasdaq composite index fell 75.17, or 2.7 percent, to 2,764.79.
For the week:
The Dow is down 378.61 points, or 3 percent.
The S&P 500 is down 40.13 points, 3 percent.
The Nasdaq is down 94.04, or 3.3 percent.
For the year to date:
The Dow is up 725.04, or 6.3 percent.
The S&P is up 47.25, or 3.8 percent.
The Nasdaq is up 111.92, or 4.2 percent.