Wall Street down by 2% on global debt concerns

United States stocks dropped about two per cent on Monday, putting the S&P on track for its fourth straight day of losses as concerns about heavy debt loads both domestically and abroad added uncertainty to a troubled market.A US congressional committee was expected to concede defeat in its bid to lower the deficit, renewing the debate over taxes and spending at a time when the impending expiration of payroll tax breaks and jobless benefits could help to undermine the economy.Reuters reported that the committees co-chairs would issue a statement, according to sources, declaring that the committee was unable to reach a deficit-reduction deal because of deep divides over taxes and spending."There is now a lot of uncertainty over the prospects of extending the payroll tax cut or unemployment benefits. Thats important because those have been serving as a stimulus for the economy, and losing them would create a drag," Chief Investment Officer at Fort Washington Investment Advisors in Cincinnati, Nick Sargen, said.In addition, Moodys said a recent rise in interest rates on French government debt and weaker economic growth prospects could be negative for the countrys credit rating.The developments create further headwinds for an already volatile market, and could extend the previous weeks losses.In Europe, the FTSEurofirst 300 index fell 2.5 per cent. In addition to the new concerns about France, Spanish Prime Minister-elect, Mariano Rajoy was under pressure to detail his policies to overcome a severe economic crisis after his centre-right party won the countrys biggest election victory in 30 years."Europes situation continues to fester, and it seems like things are getting more dire with the run-up were seeing in their yields," said Sargen, who helps oversee $38bn.The Dow Jones industrial average slid 217.41 points, or 1.84 per cent, at 11,578.75. The Standard & Poors 500 Index was down 23.71 points, or 1.95 per cent, at 1,191.94. The Nasdaq Composite Index took off 53.22 points, or 2.07 per cent, at 2,519.28.Trading volume is expected to be light this week as markets are closed for the US Thanksgiving holiday on Thursday. The light action could add to market volatility.The S&P failed to rise above 1,225 on Friday after a drop below it on Thursday triggered massive selling, and that level is now strengthening as technical resistance. Last week, the Dow fell 2.9 per cent, the S&P dropped 3.8 per cent, and the Nasdaq lost four per cent.
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