) -- Wall Street is weary of Washington's failure to solve the debt-ceiling impasse.

Amid continuous bipartisan wrangling, Friday's closing bell marked the sixth straight day that stocks finished in the red. The

Dow Jones Industrial Average

lost more than 500 points this week alone.

There was some wavering late in the session but the Dow ultimately finished down nearly 100 points, or 0.8%, to 12,143. The

S&P 500

slipped 8 points, or 0.7%, to 1292, and the


tumbled 10 points, or 0.4%, to 2756.

With Washington in a deadlock about House Speaker John Boehner's debt proposal, some say that real hope for an agreement lies in the ongoing talks between Republicans and Democrats behind closed doors. Meanwhile, the bill put forth by Boehner (R., Ohio) is expected to go to the House for a vote this evening with doubts still lingering about whether he has enough support in his own party to secure passage.

Earlier today, the market pared some losses after President Barack Obama said lawmakers "are not miles apart" in their plans to resolve the deficit issue ahead of the Aug. 2 deadline. Words and no action, however, failed to reassure Wall Street. As headline uncertainty soars, more investors are turning to a longer term strategy.

"This is a falling knife," said Ralph Fogel, head of investment strategy at Fogel Neale Partners. "I'm not going to stand in front of a freight train."

Wall Street's so-called fear index, the



which is derived from options activity in the S&P 500, soared to a four-month high on Friday, rising nearly 7%. Gold prices hit another record of $1628.30 an ounce as well. Although gold pared some gains made in the prior week, new investors rushed in, hoping to hedge risky bets in equities. Gold for December delivery last settled down $15 to $1,631 an ounce.

The benchmark 10-year Treasury rose more than one point, diluting the yield to 2.830%. The dollar weakened against a basket of currencies, with the dollar index down by 0.4%.

On top of the debt uncertainty, the government's updated estimates on GDP growth so far this year disappointed investors. The economy grew at a pace of 1.3% in the second quarter, following a revised 0.4% for the first quarter. Perhaps most concerning in Friday's GDP report was that consumer spending tapered off in the second quarter, indicating that the economy may have less momentum going forward.

In line with a weak private sector, the latest read on consumer sentiment by the University of Michigan declined to 63.7 in July, about in line with consensus estimate that the sentiment would stay unchanged from June's reading of 63.8.


latest update on business in the Midwest also did not lift market sentiment. Companies in the Chicago area cut back slightly on production and new orders in July, according the Chicago Institute of Supply Management's purchasing managers index. The index rebounded after taking a hit in May because of the Japanese earthquake disaster, but has struggled to regain solid footing since.

Earnings news failed to give stocks the boost that they needed. Losses were seen across a range of sectors, with transportation, utilities, basic materials, and energy stocks all trading weakly.


(T) - Get Report



(IBM) - Get Report



(CSCO) - Get Report

were the Dow's only gainers, while


(MRK) - Get Report



(HP) - Get Report


Walt Disney

(DIS) - Get Report

traded at the bottom. Market breadth was negative with 70% of total shares trading the New York Stock Exchange declining and only 30% advancing.

Shares of Merck fell despite the drug giant

meeting analysts' profit estimates with second-quarter earnings of 95 cents a share. The stock slipped 0.8% to $34.09.

Shares of


(SBUX) - Get Report

gained 0.9% to $40.29 after the coffee company

surpassed analysts' profit expectations and lifted its outlook late Thursday.


(CVX) - Get Report


reported second-quarter earnings of $3.85 a share, topping expectations for a profit of $3.56 a share. Revenue of $68.95 billion, however, fell short of the $71.58 billion that the market had been expecting. The stock shed 0.2% to $104.84.

Shares of

Newmont Mining

(NEM) - Get Report

lost 4% to $56 after the

gold producer said second-quarter earnings were flat from a year ago at 77 cents a share. Adjusted earnings from continuing operations were 90 cents a share and sales rose 11% to $2.38 billion. Consensus estimates were for earnings of 99 cents a share on sales of $2.51 billion.

Earlier on Friday, Moody's Investors Service placed Spain's Aa2 rating on review for possible downgrade, citing contagion risks from the eurozone's debt crisis.

Lingering euro concerns coupled with the U.S. deficit problem sent the global market sliding, too. The FTSE in London lost 1%, and the DAX in Frankfurt fell 0.4%. Hong Kong's Hang Seng shed 0.6%, and Japan's Nikkei declined 0.6%.

The September crude oil contract shed 4 cents to settle at $97.44 a barrel.


-- Written by Chao Deng and Melinda Peer in New York