NEW YORK — The stock market’s slow bleed got a little worse Tuesday.
The decline is the result of squabbling in Washington over raising the nation’s debt limit and a government shutdown that has dragged on for more than a week. The stock market’s moderate losses in the first days of the shutdown have accelerated this week as the U.S. has moved closer to an Oct. 17 deadline for lifting the government’s borrowing authority.
Stocks opened flat, moved steadily lower and slumped in the final minutes of trading Tuesday. The loss added to a three-week decline that has knocked the Standard & Poor’s 500 index down 4 percent since it hit a record high on Sept. 18.
Swings in the market will likely increase the closer the U.S. gets to the debt deadline without a resolution, said Randy Frederick, Schwab Center for Financial Research Active Trading and Derivatives managing director.
“Virtually everyone expects that there will be some sort of a resolution,” Frederick said. “But I wouldn’t be surprised if it only came right before the last minute.”
The S&P 500 index dropped 20.67 points, or 1.2 percent, to 1,655.45. It was the biggest one-day drop for the index since Aug. 20. The declines were led by phone companies.
The Dow Jones industrial average fell 159.71 points, or 1.1 percent, to 14,776.53. The Nasdaq composite dropped 75.54 points, or 2 percent, to 3,694.83.
The yield on Treasury bills maturing in one month soared to 0.28 percent, hitting its highest level since the 2008 financial crisis. The yield was 0.15 percent the day before and close to zero at the beginning of October.
The yield, which rises as the price of the notes fall, has surged as managers of money-market funds become more wary of holding short-term government debt that matures shortly after the debt deadline.
The yield on the 10-year Treasury note was little changed at 2.63 percent.