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Published 21 Nov, 2011 07:57pm

Stocks plunge as debt talks near collapse

The sell-off came as a special 12-member panel of Congress appeared ready to declare failure in its attempt to agree on how to bring the federal budget deficit down by $1.2 trillion over 10 years.
That is supposed to trigger automatic spending cuts across the government, but there were already hints that Congress would find a way around them. Analysts say that could lead to another downgrade of the U.S. credit rating.
"They're essentially giving up," said Robert Robis, head of fixed income macro strategies at ING Investment Management.
The Dow was down 314 points at 11,481 shortly after 2 p.m. EST. At its low point of the day, the Dow was down 342 points. The selling swung the Dow from a gain for the year to a loss, the first time that has happened in a month.
That the deficit talks fell apart was not exactly a surprise. But since late summer, traders have been in the mood to sell big because of any bad news — just as they have started rallies at the first sign of hope.
The Dow rose or fell 100 points or more on 15 trading days in August, 16 in September and 15 in October. It was on pace Monday for its 10th triple-digit swing this month, with six trading days to go.

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