Stocks slide as shutdown looms

U.S. stock markets tumbled Monday morning as investors braced for a government shutdown.

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The Dow Jones Industrial Average dropped over 150 points in the first minutes of trading. All three major stock indices shaved off about 1 percent of their value as Democrats and Republicans remained at a stalemate over a stopgap spending bill needed to keep the government open past Monday.

Investors returned to trading Monday after watching the House re-insert several contentious provisions to a government funding bill and send it back to the Senate early Sunday morning, just two days after Senate Democrats stripped similar demands from the original House measure that targeted ObamaCare.

The Senate is set to consider the new House proposal Monday, which would delay the president's healthcare reform law for one year, as well as erase a tax increase on medical devices meant to pay for some of the new law's costs. 

Senate Majority Leader Harry Reid (D-Nev.) has indicated he plans to trim those two amendments from the measure and return to the House a "clean" continuing resolution funding the government, setting up another showdown with hours to go before much of the government is shuttered.

Stocks have steadily slid downward in recent days as fiscal fights in Washington have heated up. The Dow spiked to a new all-time high in mid-September, after the Federal Reserve made the surprise decision to keep up economic stimulus. The central bank identified fiscal uncertainty from Washington as a factor in its decision to continue the support.

While markets are trending downward in the face of a potential government shutdown, nearly all economists and market experts expect the next fiscal fight over raising the nation's debt ceiling would have far more severe ramifications if Congress cannot strike a deal. 

The Treasury Department has determined it may not be able to pay all its bills beginning Oct. 17, and has said Congress must hike the nation's $16.7 trillion borrowing cap to avoid a market catastrophe that could wreak havoc on the global economy.


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