Global Equities Retreat as Debt Feud Continues in Washington

Stocks around the world fell Thursday, as the nearing deadline to raise the debt ceiling in the United States had anxious investors trimming their positions. President Barack Obama and legislators in Congress have been negotiating a potential budget deal for months, with little visible progress. If the debt ceiling isn't raised by next week, the country could face default and the loss of its sterling AAA debt rating. London's FTSE and Germany's DAX Index both retreated today, with stocks following in Asia. Japan's Nikkei Index and China's Shanghai Index both closed lower on the session. Job cuts from European banks, debt issues in Greece and Italy, and uneven corporate earnings have contributed to today's losses. Worries were likely stoked by a report Thursday by Credit Suisse CS saying that the U.S. economy would contract by 5% and stocks would fall by nearly a third if default occurred. Many market spectators expect a deal to be worked out in the 11th hour, pointing to the country's long string of debt ceiling raises. Global capital markets have largely remained calm, but investors continue to hedge their bets in anticipation of further stock losses. The Euro fell against the dollar, to $1.429. Gold has retraced from hitting record highs of $1,625 an ounce Wednesday, now trading at $1,615.