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Dow drops 130 points on fears of US debt default

Dow drops 130 points on fears of US debt default

Stocks tumbled at the opening on Monday, as the government shutdown dragged into a second week and lawmakers appeared to be making little progress in raising the country’s debt ceiling.

The Dow Jones Industrial Average was 130 points lower in early morning trading.

The S&P 500 and the Nasdaq also slumped at the opening of markets. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 17.

On Sunday, Republican House Speaker John Boehner warned he did not have a sufficient majority to pass legislation on raising the $16.7 trillion borrowing limit without spending cut conditions attached. Speaking to ABC television over the weekend, he added that the U.S. was on the path to a credit default.

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