President Obama warned this afternoon that the economy could head toward a “very deep recession” unless lawmakers agree to raise the debt ceiling soon. Many investors seem to agree: With lawmakers unable to agree on terms of a potential deal, several are cashing out recent gains to sit on the sidelines until they have a clearer sense of where things are headed. The Dow Jones Industrial Average fell 1.1% today, while the Standard & Poor’s 500 was -1.2% and NASDAQ -2%. Media and tech stocks also took a hit with the Dow Jones U.S. Media Index falling 1.5% today. Sony (-3.3%) was hardest hit among Big Media companies followed by CBS (-2.4%), Viacom (-2.1%), Fox (-2%), Liberty Media (-1.7%), Comcast (-1.1%), Time Warner (-1%), Disney (-0.9%), and News Corp (-0.7%). Among the broader field of companies we watch, Pandora (-7.8%) dropped most. Others licking their wounds include Cumulus (-7.1%), Facebook (-6.7%), Netflix (-5%), RealD (-4.6%), Lionsgate (-4%), and Best Buy (-3.6%). A few companies managed to eek out modest gains led by Redbox owner Outerwall (+6.2%) which is still benefiting from the recent disclosure by activist investor Jana Partners that it has bought a big stake in the company and wants changes in strategy that will pay off for shareholders.

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