US stocks are swinging between gains and losses as investors try to guess whether the debt standoff in Washington will be resolved.

Stocks plunged early on Friday after the government said the economy grew at its weakest pace since the recession ended.

Traders were already were on edge about a stalemate between lawmakers that threatens to push the nation into default for the first time. The Treasury says it might run out of cash after August 2.

Major indexes recovered some losses by midday as a debt deal appeared more likely.

Just before noon, the S&P 500 index was down a point, or 0.1 per cent, at 1300. The Dow Jones industrial average was down 33, or 0.3 per cent, at 12,207. The Nasdaq composite index was up five, or 0.2 per cent, at 2771.