Stocks Decline Sharply on Debt Indecision

U.S. stocks sank Monday as the lack of progress by American lawmakers in reaching a deficit-cutting agreement magnified worry that Europe’s debt crisis would spur a global downturn. The Dow Jones Industrial Average fell 248.85 points, or 2.11%, to 11,547.31. The S&P 500 lost 22.67 points, or 1.86%, to 1,192.98. The Nasdaq Composite fell 49.36 points, or 1.92%, to 2,523.14.

The Super Committee’s failure to come to an agreement on significant deficit reduction-and the possibility it may undo the automatic $1.2 trillion in budget cuts-is risking another U.S. debt downgrade, a 10 percent drop in stocks and a decline in the US dollar, analysts say.

Hewlett-Packard Co. on Monday reported a fiscal fourth-quarter profit of $239 million, or 12 cents a share, compared with a profit of $2.54 billion, or $1.10 a share, for the year-earlier period. Revenue was $32.1 billion, down from $33.3 billion.

Gold futures slipped under $1,700 an ounce Monday as wholesale asset selling intensified and investors seemed to think cash was the only place left to hide. Gold for December delivery lost $46.50, or 2.7%, to settle at $1,678.60 an ounce on the Comex division of the New York Mercantile Exchange.

After touching a six-week high against major currencies, the dollar pared its gains on Monday as the inability of U.S. lawmakers to agree on deficit-cutting measures weighed on the currency.