WASHINGTON >> The bipartisan leadership of a special congressional deficit supercommittee officially announced today that the panel has failed to reach an agreement.

Democratic Sen. Patty Murray and Republican Rep. Jeb Hensarling said that despite “intense deliberations” the members of the panel have been unable “to bridge the committee’s significant differences.”

The panel was established by this summer’s budget and debt agreement to cut at least $1.2 trillion from the budget over 10 years. But the panel has been divided from the beginning over taxes and cuts to popular government benefit programs like Medicare.

Last-ditch bipartisan talks failed to produce a breakthrough.

The Dow Jones industrial average lost almost 250 points after the committee indicated earlier in the day that there would be no deal.

“They’re essentially giving up,” said Robert Robis, head of fixed income macro strategies at ING Investment Management. 

The supercommittee stalemate is supposed to trigger automatic spending cuts across the government, but there were already hints that Congress would find a way around them. Analysts say that could lead to another downgrade of the U.S. credit rating.

In addition, the failure raises the question of how a gridlocked Congress would find a way to extend a cut in the Social Security tax. Congress passed it for one year, and some lawmakers support extending it because economic growth remains weak.

Each of those measures puts cash in the pockets of Americans, who can spend it and help the economy grow.

It also shows lawmakers may not be able to make progress on anything budget-related in the coming months, said Robert Pavlik, chief market strategist with Banyan Partners LLC in New York.

“It shows that there’s a bigger problem at hand, and if they can’t work to resolve these relatively small yet meaningful issues, what’s going to happen if we get into a situation like Europe is in?” he said. “And we’re kind of headed there.”

The result was another day of heavy selling in a market that has grown used to big swings. The Dow finished down 248.85 points, or 2.1 percent, at 11,547.31. At its low point of the day, the Dow was down 342.

Volatility seized the stock market in late July, when Congress was wrestling with whether to raise the limit on how much the federal government can borrow.

The Dow rose or fell 100 points or more on 15 trading days in August, 16 in September and 15 in October. Today was its 10th triple-digit move this month, with six trading days to go.

The selling swung the Dow from a gain for the year to a loss.