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10B Daily News – Saturday, July 30, 2011 Furniture DEPOT 235 S Main St., Red Bluff 530 527-1657 www.thefurnituredepot.net HOURS: MONDAY-FRIDAY 9:00-6:00 SATURDAY 9:00-5:00 • SUNDAY 11:00-5:00 FURNITURE *See store for details financial markets: Anxious. The Dow Jones industri- Markets on edge as debt limit debate drags on Wall Street The word of the day in al average fell nearly 100 points, its sixth straight decline, as the U.S. edged closer to a Tuesday deadline to raise the country’s bor- rowing limit or risk the prospect of a debt default. A dismal report on U.S. eco- nomic growth this spring also pushed stocks lower and sent the yield on the 10- year Treasury note to its lowest level of the year. The combination of bad economic news and grow- ing worries about a possible default was evident in near- ly every measure of investor confidence: — The S&P 500 index had its worst week in a year. — The Dow lost 581 points over the past six days. — All 10 industry groups in the S&P 500 stock index fell. — Gold rose nearly 1 percent to $1,631 an ounce. — A measure of stock market volatility, the VIX, rose 6 percent. — The cost to protect against a U.S. default within the next year reached a record high. The cost to insure Treasurys for one year jumped 54 percent this week. Analysts said that a spike in short-term Treasury yields provided a clear sign that the market was increas- ingly worried about a default. ‘‘It’s not panic, but we are pre-positioning in case something goes wrong over the weekend,’’ said Thomas Tzitzouris, head of fixed income research at Strategas Research Partners. The Dow started the day sharply lower, falling to 12,083 shortly after the market opened. Stocks regained their losses after President Barack Obama said in a 10:45 statement there were many paths to a compromise on raising the debt limit. By 11:15, the Dow had briefly turned pos- itive for the day. The Dow dripped steadily lower until its 4pm close. The Dow Jones industri- al average fell 96.87 points, or 0.8 percent, to close at 12,143.24. The Standard and Poor’s 500 index lost 8.39 points, or 0.6 percent, to 1,292.28. The Nasdaq composite fell 9.87, or 0.4 percent, to 2,756.38 The yield on the bench- mark 10-year Treasury note fell to 2.80 percent, its low- est level of the year. Bond yields rise when their prices fall. If Congress fails to act by Tuesday, the U.S. may not be able to pay all its financial obligations. That includes interest payments on bonds and the salaries of federal employees. A default on U.S. Treasury debt could wreak havoc on financial markets and the economy. Many analysts continue to believe a deal to raise the country’s borrowing limit will be made before the Aug. 2 deadline. ‘‘It seems unlikely that Congress would choose financial Armageddon over some type of compromise,’’ said Joseph S. Tanious, a market strategist with J.P. Morgan Asset Manage- ment. Some argue that the mar- ket’s recent downturn is overshadowing strong cor- porate earnings reports. They also say the market is ignoring other reasons to believe the economy will bounce back in the second half of the year. ‘‘It’s a very confusing time, but once this cloud lifts, market participants are going to turn around and say, ‘This isn’t so bad.’,’’ said John Canally, an economist with LPL Financial. ‘‘It’s definitely going to be a rocky couple of days.’’ The government report- ed early Friday that eco- nomic growth slowed in the first half of the year to its weakest pace since the recession ended two years ago. Some investors said that the economic report wasn’t as bad as it first appeared. Phil Orlando, chief strate- gist at Federated Investors, said that the report was a ‘‘rearview mirror view of an economy that was strug- gling with the impact of the earthquake in Japan and high commodity prices.’’ Orlando said he believes that rising corporate profits and a rebound in the auto industry will push stocks higher for the rest of the year. Merck fell 2 percent even after the company reported strong earnings. Chevron dropped 1 percent despite better second-quar- ter earnings. Housewares maker Newell Rubbermaid Inc. jumped 8 percent after reporting that its profit rose 13 percent as strong demand from emerging markets offset weakness in the U.S. Expedia Inc. gained 9 percent after the travel website operator said its income rose more than analysts had expected. It credited an increase in the number of travel bookings and higher prices for plane tickets and hotel rooms. The Dow is still up 4.9 percent for the year, but it is down 667 points, or 5.2 percent, from its highest point of the year, which it reached on April 29. Small-company stocks fared worse than the rest of the market as investors sold stocks they consider to be the most risky. The Russell 2000, which measures small stocks, fell 5.3 per- cent this week, worse than 3.9 percent decline in the S&P 500 index. Two stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume was above average at 4.5 billion shares. Monthly Cash Income For Wartime Vets & Spouses! Cash for assisted living or in-home care. No service connected injury required. Our estate planning tools can help you meet the income and asset requirements, even if you have been told you don’t qualify. 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