Small-business owners' optimism about the economy is dwindling, which casts a dark cloud over banks' lending efforts, according to a new survey conducted by Wells Fargo and Gallup.

More business owners are pessimistic about their financial situation and they expect to spend less on capital projects and hiring in coming quarters, according to the survey. The Wells Fargo/Gallup Small Business Index, which is based on the survey's results, declined for the third straight quarter.

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