Rally fades amid fears of Washington gridlock

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by Laura Matovina

NEW YORK (AP) -- The stock market is coming off one of its worst weeks of the year.

Traders have been worried about the possibility that a divided Washington may not act in time to avert a series of tax increases and harsh spending cuts by the beginning of next year. Remarks Friday by President Barack Obama and House Speaker John Boehner outlining opposing views on raising taxes for the wealthiest Amercans didn't do much to cheer the market.

An early rally was mostly gone by the close Friday, leaving major indexes down more than 2 percent for the week.

The Dow wound up with a gain of about four points to close at 12,815. The S&P 500 edged up two points and starts the week at 1,380. The Nasdaq is at 2,905 after gaining nine points on Friday.

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