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Traders bought U.S. government bonds, considered to be a safer investment than stocks, pushing the yield on the benchmark 10-year Treasury note down to 2.84 percent from 2.95 percent late Thursday. As demand for bonds increases, the government is able to pay bondholders lower interest rates, causing yields to fall.

Gold rose about $10, or just under 1 percent, to $1,627 per ounce. Gold prices tend to rise when investors are nervous about turbulence in other markets.

House Republicans are trying for the third straight day to pass a bill that would raise the borrowing limit while cutting federal spending by nearly $1 trillion.

President BarackObama said again Friday that he will not sign the Republican bill. Democrats say any bill must include revenue increases from higher taxes as well as cuts.

Senate Democratic leader Harry Reid said he will seek suggestions from Republicans on reaching an agreement on the debt limit. That raised hopes among analysts for a bipartisan compromise.

A default by the U.S. could increase borrowing costs for the government and consumers. That would dig the nation into a deeper deficit hole and discourage people from borrowing money to buy homes and cars. Even if Congress does reach a deal, rating agencies might still downgrade U.S. debt, which could have the same effect on borrowing costs.

The dollar fell 1.8 percent against the Swiss franc as traders’ confidence in the U.S. currency eroded.

Merck fell 2 percent even after the company reported strong earnings. Chevron also lost a fraction of a percent despite strong second-quarter earnings. Housewares maker Newell Rubbermaid Inc. jumped 8 percent after reporting that its profit rose 13 percent as strong demand from emerging markets offset weakness in the U.S.

Expedia Inc. surged 8 percent after the travel website operator said its income rose more than analysts had expected because of an increase in the number of travel bookings and higher prices for plane tickets and hotel rooms.