Stocks in U. S. decline amid a worldwide drop

Wall Street fell again Wednesday as stocks tumbled worldwide on worries about the economy.

The Standard & Poor’s 500 index dropped 0.7% after House Speaker Kevin McCarthy said Republicans and Democrats remain “far apart” in their efforts to prevent a potentially disastrous default on the U. S. debt.

The main U. S. stock index is on track for its worst week in more than two months as the once- unthinkable creeps closer to possibility.

The Dow Jones industrial average fell 0.8%, while the Nasdaq composite lost 0.6%.

Other markets around the world were hit even harder as discouraging economic f igures piled up. Stock indexes tumbled 1.7% in London, 1.9% in Frankfurt and 1.6% in Hong Kong.

On Wall Street, the focus is squarely on Capitol Hill and the White House, where the battle between Democrats and Republicans is threatening to cause the nation’s first- ever default on its debt. The U. S. government could run out of cash to pay its bills as soon as June 1 unless Congress allows it to borrow more, and the widespread expectation is that a default would result in tremendous economic pain.

The widespread belief on Wall Street has been that Congress would come to an agreement at the eleventh hour, as it has several times before, because a default would benefit no one.

“It will sort itself out over the next couple of weeks and end up being a positive catalyst,” said Jay Hatfield, chief executive of Infrastructure Capital Advisors.

All told, the S& P 500 fell 30.34 points to 4,115.24. The Dow dropped 255.59 points to 32,799.92, and the Nasdaq lost 76.08 points to close at 12,484.16.

In the bond market, the yield on the 10- year Treasury rose to 3.73% from 3.70% late Tuesday. It helps set rates for mortgages and other important loans.

The yield on the two- year Treasury, which moves more on expectations for Fed action, rose to 4.37% from 4.33%.