* U.S. lawmakers face midnight deadline for funding bill
* Brazil Bovespa falls 1.67 pct, Mexico IPC down 0.83 pct
SAO PAULO, Sept 30 (Reuters) - Brazilian stocks dropped for
the fifth straight day on Monday, weighed down by concerns a
possible shut down of the U.S. government could hurt markets.
Mexico's IPC index headed for its lowest close in
three weeks, while Chile's bourse retreated for the
fifth straight day.
U.S. lawmakers continued to wrangle on Monday about a
funding bill for the federal government. A lack of an agreement
by the end of the day would likely cause the government to
shutdown at least briefly.
A prolonged shutdown could have a major impact on the
economy and consumer confidence. As many as 1 million U.S.
federal employees could face unpaid furloughs.
The concerns drove investors away from riskier assets such
as Latin American equities, with Brazil's benchmark Bovespa
stock index falling 1.67 percent to 52,839.15, its
lowest in over three weeks.
"The political crisis in the U.S. is adding to uncertainty
and a negative trend for the market, which is unlikely to
recover today," said Leandro Silvestrini, an analyst with
Intrader in Sao Paulo.
The most widely traded blue-chip shares drove losses in the
index, with mining firm Vale SA dropping 1.28 percent
and Itaú Unibanco Holding SA, Brazil's largest
non-government bank, down 1.89 percent.
Local stocks with high liquidity tend to attract foreign
investors looking for exposure to Latin American equities, with
their performance often tracking global risk appetite.
Shares of OGX Petroleo e Gas Participacoes SA,
the oil company controlled by Brazilian tycoon Eike Batista,
fell 14 percent to 0.24 reais, its lowest price ever.
The company, which is widely expected to file for bankruptcy
protection within the next few weeks, is considering selling its
Tubarão Martelo oil field to Malaysia's Petronas, a local
newspaper reported on Monday.
Shipbuilder OSX Brasil SA, OGX's sister company
in Batistas's EBX Group holding firm, dropped 13 percent. The
company is also widely expected to file for bankruptcy
protection in coming weeks.
Mexico's IPC index fell for the third straight day,
losing 0.83 percent to 40,562.73.
Shares of mining firm Grupo Mexico slipped 1.6
percent, contributing most to the index's losses, while shares
of telecommunications firm America Movil dropped 0.45
Chile's IPSA index fell 0.96 percent as shares of
conglomerate Copec fell 1 percent.
Latin America's key stock indexes at 1626 GMT:
Stock indexes daily % YTD %
Latest change change
MSCI LatAm 3,327.44 -0.3 -12.12
Brazil Bovespa 52,839.15 -1.67 -13.31
Mexico IPC 40,562.73 -0.83 -7.19
Chile IPSA 3,835.91 -0.96 -10.82
Chile IGPA 18,885.82 -0.75 -10.37
Argentina MerVal 4,640.70 -1.89 62.59
Colombia IGBC 14,113.71 -0.02 -4.09
Peru IGRA 15,919.88 -0.16 -22.83
Venezuela IBC 1,794,287.