NEW YORK (CNNMoney)
The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all dropped by nearly 1% Monday. The dollar weakened against most other global currencies.
During the first six days of the government shutdown, investors had a relatively blase attitude toward the drama in Washington.
Now, as Congress is pushing the United States closer and closer to breaching its debt ceiling and possibly forcing the government into its first default, investors are getting scared.
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The government shutdown is in day 7, and lawmakers appear no closer to resolving the impasse. That's forced investors to consider what that could mean for the markets and the global economy.
On Sunday, Treasury Secretary Jack Lew said that Congress was "playing with fire," and warned the U.S. could default in just over a week.
Related: Shutdown, debt ceiling uncertainty looms
Warning bells are ringing: Analysts have started sounding alarm bells.
Last week, Bank of America analysts said that the government shutdown wouldn't impact fourth-quarter GDP growth. But over the weekend, they changed their tune and lowered growth estimates for the fourth quarter to 2% from 2.5%.
ETX Capital market strategist Ishaq Siddiqi said the debt ceiling debacle could lead to a "subsequent meltdown of global asset prices."
Related: Fear & Greed Index, still dwelling in fear
Earnings kick off this week: The first corporate results for the third quarter come out Tuesday, when aluminum maker Alcoa (AA, Fortune 500) reports after the market close. Two of the biggest banks -- Dow component JPMorgan Chase (JPM, Fortune 500)and Wells Fargo (WFC, Fortune 500) report Friday morning.
Analysts fear that weak third quarter earnings could also weigh on stock prices.
What's moving: Shares of Apple (AAPL, Fortune 500) rose, after the iPhone maker was upgraded by Jefferies.
Shares of BlackBerry (BBRY)gained 4% on rumors that new buyers are emerging for the troubled smartphone maker.
J.C. Penney's (JCP, Fortune 500)stock continued to move lower hitting lows not seen by the retailer since the late 1980s.
Related: Fed taper won't cause another Asia financial crisis
U.S. debt debate hits world markets: European markets fell in afternoon trading, and Asian markets ended with losses. Japan's Nikkei took a 1.2% tumble. 
First Published: October 7, 2013: 9:48 AM ET
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