Stock market dives on news of debt panel's apparent failure

Stocks plunged Monday as investors digested the news that the deficit supercommittee appears to have failed.

Already on fragile ground thanks to the growing debt crisis in Europe, stocks plunged further after reports emerged that the 12 lawmakers appointed to tackle the nation's debt seemed to have come up empty-handed.

The Dow Jones industrial average opened the week's trading by dropping nearly 200 points in the first few minutes, losing over 1.5 percent of its value. The S&P 500 and NASDAQ took even steeper dives, falling by over 1.75 percent in the first 10 minutes of market activity.

Monday is the de facto deadline for the supercommittee to put forward a proposal to cut at least $1.2 trillion from the nation's deficit. Lawmakers gave every indication over the weekend that the talks had proven fruitless, and both parties began to point fingers for the impasse. The supercommittee's official deadline for reaching a deal is Wednesday, but any plan needs to be made public for at least two days.

The creation of the supercommittee was a key part of August's contentious debt-limit agreement, which also roiled markets and resulted in the nation's first-ever credit downgrade.

Credit rating agencies had indicated that they would like to see strong action from Congress to tackle the deficit, but the two agencies that still rate U.S. debt at triple-A have not indicated that a supercommittee failure would bring about an automatic downgrade.

With no plan forthcoming, $1.2 trillion in automatic spending cuts are supposed to trigger in 2013, though lawmakers have hinted that those "triggered" cuts might be altered. 

Further exacerbating market woes has been continuing developments tied to the European debt crisis. Moody's Investors Service warned Monday that France's triple-A rating could be in danger, as weakening economic growth and growing pressure from other struggling European nations weigh on the continent's second largest economy.

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