NEW YORK ( TheStreet) -- Stocks closed down sharply on Monday as political gridlock on U.S. deficit cuts raised a new set of concerns for Wall Street.
Losses were mitigated late in the session when Sen. Max Baucus (D., Mont.), chairman of the Senate Finance Committee, stoked hopes the congressional super committee would be able to reach a compromise but that possibility proved fleeting as the committee issued a statement after the close claiming an agreement was "not possible."
Skepticism that an agreement would be reached ruled the day, although ongoing European debt contagion fears also added to the market's edginess. The committee's failure now has investors worried about the potential for more damage to the U.S.'s credit rating or the confidence of consumers and businesses being shook at a time when the slow recovery in the U.S. economy remains fragile.
The Dow Jones Industrial Average dropped 249 points, or 2.1%, to finish at 11,547. Its session low was 11,454. The weakest blue-chip performers were Bank of America (BAC), Walt Disney Company (DIS)and Hewlett-Packard (HPQ).The S&P 500, dipping below 1200 for the first time since late October, lost 23 points, or 1.9%, to close at 1193. Technical analysts were looking for the S&P 500 to hold the 1180 level after breaking through several key technical levels in the prior week. Industrial and financial stocks led the index lower. The tech-heavy Nasdaq shed 49 points, or 1.9%, to settle at 2523.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV