Impasse over US debt limit sends stocks lower

NEW YORK (AP) ? The debt showdown in Washington is rattling the stock market again.

Stocks fell Monday after Republican and Democratic lawmakers offered competing proposals to solve the nation’s debt crisis. If an agreement is not reached by Aug. 2, the U.S. won’t have enough cash to pay all its bills. That could have a catastrophic impact on financial markets.

The Dow Jones industrial average fell 88 points, or 0.7 percent, to close at 12,593. The Dow had been down as many as 145 points earlier. The Standard & Poor’s 500 index fell 8, or 0.6 percent, to 1,337. The Nasdaq composite index fell 16, or 0.6 percent, to 2,843.

About four stocks fell for every one that rose on the New York Stock Exchange. Volume was relatively light at 3.3 billion shares.