NEW YORK — Stocks slid Friday, sending two major indexes to their worst week in more than a year, as Congress prolonged the uncertainty over the nation’s debt ceiling.
“The debt issue is hurting the economy,” said Aaron Smith, senior economist at Moody’s Analytics. “Confidence is dissolving more rapidly than the data and markets would suggest.”
The White House said President Barack Obama would consider signing a short-term extension of the debt ceiling if it would give lawmakers time to complete a longer-term deal.
But spokesman Jay Carney said the administration still believes a deal can be done to raise the borrowing limit by Thursday.
“I don’t think Tuesday is as big of a deal as, say, midmonth; interest payments are due on the 15th, so if we didn’t have a deal by then, it could get ugly pretty fast,” Smith said.
Recovering from a 156-point drop, the Dow Jones industrial average ended down 96.87 points, or 0.8 percent, to 12,143.24. The blue-chip benchmark lost 4.2 percent from a week ago, its worst week in percentage terms since early July 2010. It fell 2.2 percent this month, its third straight monthly loss.
The Standard & Poor’s 500 on Friday declined 8.39 points, or 0.7 percent, to 1,292.28, with a drop in energy and materials leading declines for all 10 industry groups. For the week, the index of large-cap U.S. companies lost 3.9 percent — also its worst stretch in just over a year — and 2.2 percent for the month.
The Nasdaq composite ended down 9.87 points, or 0.4 percent, to 2,756.38. It lost 3.6 percent for the week and 0.6 percent for the month.
In the week ahead, “the debt-ceiling debate is issue number one, and then the attention will quickly shift to the jobs report on Friday. We’re thinking we’ll see some improvement,” Smith said.
“If we do get a weak number, the July numbers are going to predate the most intense debt-ceiling-driven caution on the part of companies that we’ve seen,” said Smith of reluctance by cash- flush corporate America to hire, given the shaky climate.
