Market slides

[Danzig]

Deficit doubts
Tuesday's budget deal between Congress and the White House was hailed in Washington as a resolution of the months-long battle that brought the government to the brink of insolvency. But the agreement did little to lift the clouds of uncertainty over exactly what government spending will be cut.

Defense contractors, state governments and jobless workers, to name just a few, have been left in limbo, unsure whether the budget ax will cut off critical cash from Washington. Those spending cuts won't be finalized until the end of the year.

If the plan is fully enacted, the deficits would shrink by less than $3 trillion over the next 10 years. That's less than the $4 trillion that bond rater Standard and Poor's said was needed to renew the government's AAA bond rating. It also fell short of what some investors were looking for.

"You saw that we didn't tackle the entitlement programs: no Medicare, Medicaid; no Social Security," said Steve Grasso, head of institutional sales at Stuart Frankel. "I don't think the markets like what they got out of it. That's why you see gold rising and equities falling."