US Stocks Suffer Longest Losing Streak Since 2008

The US isn’t defaulting, but the stock market has not cheered anyway. US stocks fell hard Tuesday, marking their longest losing streak since the heart of the 2008 credit crisis, on investor worries about upcoming federal spending cuts and a likely stall in the recovery. The eight-day losing stretch was the longest since weeks after the collapse of Lehman Bros. and, by some measures, the peak of the US credit crisis.

The US isn’t defaulting, but the stock market has not cheered anyway. US stocks fell hard Tuesday, marking their longest losing streak since the heart of the 2008 credit crisis, on investor worries about upcoming federal spending cuts and a likely stall in the recovery. The eight-day losing stretch was the longest since weeks after the collapse of Lehman Bros. and, by some measures, the peak of the US credit crisis.

Though relieved at Washington’s ability to forge an eleventh-hour debt-ceiling plan that averted a feared default, investors are spooked by the notion that the government cutbacks called for in the debt plan could further weaken an already torpid economy, the Los Angeles Times reports.

Related: Economic Policy Institute: US Debt Deal Will Cost 1.8 Million Jobs

“Investors are looking past the budget situation and realizing this is an austerity plan,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago. “We have an economy that’s struggling to stay afloat and we don’t have the ammunition to keep prodding it forward.”

The Dow skidded 265.87 points, or 2.2%, to 11,866.62, its worst loss in two months.

Investors scrambled into gold and U.S. Treasury bonds — perceived havens — as chatter on Wall Street turned to whether the economy might be headed back into recession.

The selling was driven by a government report that showed consumer spending suffering its worst decline in June since September 2009. Consumer spending fell 0.2%, compared with the 0.1% increase that economists expected.

Combined with a related rise in personal savings, the economic news indicated that the American public –- bombarded by ubiquitous warnings about the debt ceiling and reeling from chronic unemployment -– is further pulling in its horns.

Treasury bonds continued their startling three-day rally. The yield on the benchmark 10-year Treasury note plunged to a nine-month low of 2.61% from 2.75% on Monday.

The yield on the 30-year Treasury bond skidded below 4%, falling to 3.90% from 4.08%. It was at 4.28% a week ago.