DOW

Dow

12,143.24

-96.87

-0.79%

By: Jeff Cox

CNBC.com Staff Writer

A difficult week on Wall Street came to a dismal end, with storm clouds of another recession and a crippling debt crisis circling overhead and dampening investor appetite for risk.

Major averages again sold off into the close, capping a week in which the market lost more than 4 percent and prepared for the worst that could lie ahead. Washington leaders failed to reach an agreement on raising the $14.3 trillion debt ceiling, setting the table for more troubles when the market reopens next week.

Stocks made a series of pushes toward breakeven, and the Nasdaq tech gauge turned mildly positive again heading into the final two hours of trading. Financials were the market's best performer while utilities were the biggest weight.


Hopes lingered for an 11th-hour deal to raise the $14.3 trillion debt ceiling and avoid what Obama administration officials describe as potential catastrophe.

Another round of strong earnings failed to assuage investors worried over the country's direction.

"Dangerous, absolutely dangerous," is how Keith Springer, president of Springer Investment Advisory in Sacramento, Calif., described the state of markets. "The problem is the market reacts to two things, greed and fear. Right now there's no greed, in the air, it's all fear."

The stock market came off severe morning lows on rumors of some halting progress in Washington on getting a debt ceiling deal hammered out.


Hopes for a debt deal were precarious as lawmakers held dueling news conferences and TV interviews suggesting that an agreement remained elusive. Senate Majority Leader Harry Reid said Democrats would not agree to a short-term deal.

"You have both sides screaming and yelling like 2-year-olds," Springer said. "They're creating a lot of fear and if they don't have a deal by the end of today you're going to see the market sell off and probably be down 200 points by the end of the day."