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Technology stocks are pulling the S&P 500 down today. The tech-heavy NASDAQ Composite Index has dropped 1.7% as of 1:45 p.m. EDT as fear spreads over the looming debt-ceiling crisis. The S&P 500 is down 0.9%, and the largest exchange-traded fund tracking the S&P 500, the SPDR S&P 500 , is down 0.9% as well. The CBOE Volatility Index , also known as the "fear index," is up 4.2%.
Nearly the entire technology sector is down today, with S&P 500 heavyweights Apple, Microsoft, Google, and IBM all losing nearly 1%.
Stocks that have flown high this year are taking the biggest hits, with LinkedIn down 6.7%, Facebook down 6.2%, and Yahoo down 5%. While Yahoo is in the S&P 500, LinkedIn and Facebook have not yet joined.
There is no tech-specific news sending these stocks down. However, fear seems to be spreading that Congress will risk defaulting on the country's debt this month. One of the nation's major creditors, the Chinese government, reached out to the U.S., with Chinese Vice Finance Minister Zhu Guangyao saying Washington "needs to take realistic and resolute steps to ensure against default on the national debt."
A small step was taken today when President Barack Obama talked on the phone with House Speaker John Boehner. However, according to Boehner, the president just reaffirmed that he would not negotiate on Obamacare or the debt ceiling.
As the debt ceiling debate and government shutdown continue, it's important to remember that while the shutdown is hurting the economy to the tune of 0.1 percentage points of GDP growth per week, even a temporary default on the country's debt would likely send the U.S. and world economies into recession.
I believe Congress will raise the debt ceiling before the country defaults, but probably not until the last minute. In both the public and private sectors, governance functions best when stakeholders educate themselves, take an active interest in what's going on, and hold their representatives accountable.
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The article Tech Stocks Are Killing the S&P 500 Today originally appeared on Fool.com.Dan Dzombak can be found on Twitter @DanDzombak or on his Facebook page, DanDzombak. He has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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