Stock losses accelerate on D.C. gridlock

Specilaist Fabian Caceres works on the floor of Specilaist Fabian Caceres works on the floor of the New York Stock Exchange Monday. Traders recently have become nervous about the standoff in Washington, particularly over the debt ceiling. The U.S. has to raise its debt ceiling by Oct. 17. (Oct. 7, 2013) Photo Credit: AP

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The stock market's slow bleed got a little worse Tuesday.

The decline is the result of squabbling in Washington over raising the nation's debt limit and a government shutdown that has dragged on for more than a week. The stock market's moderate losses in the first days of the shutdown have accelerated this week as the United States has moved closer to an Oct. 17 deadline for lifting the government's borrowing authority.

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The loss added to a three-week decline that has knocked the Standard & Poor's 500 index down 4 percent since it hit a record high on Sept. 18.

The S&P 500 index dropped 1.23 percent to 1,655.45. The Dow Jones industrial average fell 159.71 points to 14,776.53. The Nasdaq composite dropped 2.00 percent to 3,694.83.

The yield on Treasury bills maturing in one month soared to 0.28 percent, hitting its highest level since the 2008 financial crisis. The yield was 0.15 percent the day before.

The yield, which rises as the price of the notes fall, has surged as managers of money-market funds become more wary of holding short-term government debt that matures shortly after the debt deadline. -- AP

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