Stock Markets Tremble As Debt Ceiling Debate Rages In Washington

NEW YORK -- With just over a week left before the federal government is set to exhaust its borrowing authority, financial markets are on edge.

U.S. stock market futures shuddered Monday, and Asian and European stocks dropped, as federal policymakers still had not come to an agreement to raise the nation's debt ceiling and avoid default. Investors shunned risky assets and moved money toward safety. The tremors, though relatively muted for now, suggest that anxiety about the ongoing stalemate in Washington has crept into markets worldwide, dampening economic prospects as the reliability of the world's most rock-solid credit has been called into doubt.

"There's a lot of disappointment that there doesn't seem to be a process," said John Silvia, chief economist at Wells Fargo, in an interview before the U.S. stock market opened Monday. "We have enough plans. All we really need is people to come to some kind of an agreement on what's going to get done."

White House Chief of Staff Bill Daley said Sunday on CBS that markets may experience "a few stressful days" in the absence of a debt ceiling deal. That prediction seems to be coming true.