(MENAFN - AFP) US stocks suffered hefty losses Thursday as the partial government shutdown dragged through a third day and worries climbed that the budget battle could escalate into a default.
At the closing bell, the Dow Jones Industrial Average dropped 136.28 points (0.90 percent) to 14,996.86.
The broad-based S&P 500 fell 15.30 (0.90 percent) to 1,678.57, while the tech-rich Nasdaq Composite Index tumbled 40.68 (1.07 percent) to 3,774.34.
While the shutdown has fueled jitters, analysts have generally expressed even deeper concerns about the October 17 deadline to raise the debt ceiling.
International Monetary Fund chief Christine Lagarde warned that a US failure to raise the ceiling could wreak havoc on the global economy, while the Treasury Department said a default could have a "catastrophic" effect on the economy.
The comments likely raised the anxiety of some investors, said Jack Ablin, chief investment officer of BMO Private Bank.
But Ablin said swings of 400 and 500 points occurred during the last big fight on the debt ceiling in 2011. "As we close in on the deadline, we could see heightened levels of volatility," he said.
Ablin also cited "somewhat disappointing" data from the Institute for Supply Management. The ISM reading on non-manufacturing activity fell to 54.4 percent in September, down 4.2 points from August.