U.S. stocks pared early losses Monday as investors largely shook off concerns about the U.S. government's growing debt problem. The S&P 500 was down about 0.3% in recent trading after opening 1% lower.

Stocks slumped at the open of trading on Monday after a downgrade of U.S. credit triggered a spike in debt yields that threatened to raise borrowing costs throughout the nation's economy. The Dow Jones Industrial Average dropped 295 points, or 0.7%, while the S &P 500 fell 0.9%. The tech-heavy Nasdaq plunged 1.2%.

The stock market opened with losses Monday as trading began for the first time since the U.S. government suffered a significant hit to its creditworthiness. The Dow Jones Industrial Average,