NEW YORK—U.S. stocks fell on Monday as investor concern over debt issues in the United States and Europe dragged shares lower across all industries.
President Barack Obama’s self-imposed deadline to reach a new debt deal is in five days, and no progress has been made as of Monday. However, Republicans and Democrats in both chambers are looking at alternatives to avoid a U.S. default on its debt.
Ratings agency Moody’s Investors Service has already said that the firm is reviewing the U.S.’s Aaa rating for a possible downgrade even if a deal is reached prior to Aug. 2, when most economists believe a default would occur if the debt ceiling isn’t raised.
The Dow Jones Industrial Average fell 94.57 points, or 0.76 percent, on Monday. The S&P 500 Index dropped 10.7 points, or 0.81 percent, while the Nasdaq dropped by 0.89 percent.
Bank shares fell by more than most other industries as investors bet that the brunt of the pain of sovereign debt defaults would be felt at financial services firms that hold such securities. Shares of Bank of America Corp. dropped 2.8 percent to $9.70 and shares of Citigroup Inc. likewise lost 1.7 percent.
The overall worries were a boon to commodities, especially gold and silver, which serve as haven investments for investors fearful of risk. Gold futures for August delivery rose to a record high Monday, exceeding $1,600 per ounce. Silver futures also rose by $1.18 to settle at $40.25 per ounce.
