As Debt Deadline Looms, Stocks Fall In Volatile Trade

The major averages swung wildly on Friday ahead of what is expected to be a tense weekend for traders and politicians alike. Tuesday, August 2nd, is the deadline that Treasury Secretary Tim Geithner has given Congress to raise the debt ceiling. Furthermore, it does not appear that lawmakers are any closer to making a deal than they were at the beginning of the week. Republicans in the House of Representatives are fractured and haven't been able to pass the Boehner Bill, and the Democratic Senate has said that even if it does pass, it will be shot down in the upper chamber. Right now, it is a stalemate, and when the markets open on Monday, without a deal, things could get ugly quickly. On Friday, the Dow Jones Industrial Average fell 97 points to close at 12,143, marking the 5th straight day of declines and an end to an ugly week. The widely watched blue-chip average traded in a range between 12,083 and 12,243. The SPDR S&P 500 ETF

shed 0.68% to $129.33. Volume was very heavy with more than 306 million SPY shares trading hands compared to a 3-month daily average of 184.7 million shares. Market players were clearly moving money around in expectation of continued volatility next week. The PowerShares QQQ Trust ETF

, which tracks the performance of the Nasdaq 100, lost 0.33% to $58.00 after spending a good part of the day in positive territory. The QQQ is up 6.5% year-to-date. Crude oil fell on worst than expected Q2 GDP numbers. Second quarter GDP came in at 1.3% versus expectations of 1.7%. This put pressure on crude oil, which fell 1.56% to $95.92. The United States Oil Fund ETF

lost 1.29% to close at $37.42. Gold hit a new record high on Friday as debt ceiling fears intensified ahead of the weekend. COMEX gold futures added 0.81% to $1,629.30. The SPDR Gold Trust ETF

climbed 0.62% to $158.29. Market participants continued to pile into Treasuries on Friday, despite the potential for a U.S. downgrade and even a default if the debt ceiling is not raised. Some observers pointed to the weak GDP number as well as a short squeeze as being responsible for the big move. The iShares Barclays 20+ Year Treasury Bond ETF

surged 1.98% to $97.92. The yield on the 10-Year Note fell 14.9 basis points to 2.80%. The U.S. Dollar fell on Friday as the world awaits news out of Washington D.C. this weekend. The PowerShares DB US Dollar Index Bullish ETF

, which tracks the performance of the greenback versus a basket of foreign currencies, lost 0.47% to $21.03. The closely watched EUR/USD pair is currently trading at $1.4399.