Stocks plunge on debt fears

There’s only so much bad news the stock market can ignore.

Investors woke up Monday morning to news that a select congressional committee had failed, as expected, to break a long-running deadlock on solutions to the federal budget deficit. Analysts had been saying for weeks that the committee’s work would have much less impact on the markets than the high-profile bickering that sent stocks reeling in August.

But the deepening debt crisis in Europe is harder to ignore.

“Complacency is running at an uncomfortably high level,” said Gluskin Shiff's Chief Economist David Rosenberg. "Hope is one thing; denial quite another. Neither are very effective investment strategies.”

That complacency was tested Monday, as heavy selling sent stocks lower, knocking more than two percent off the major market indices.

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