US STOCKS-Wall St down on growing default concerns

Reuters

* Some progress, but no clear sign of end to fiscal impasse

* Unexpected drop in exports from China weigh on globalequities

* Expedia shares plunge after Deutsche Bank downgrade

* Indexes off: Dow 0.5 pct; S&P 0.4 pct; Nasdaq 0.4 pct

By Angela Moon

NEW YORK, Oct 14 (Reuters) - U.S. stocks fell broadly onMonday, focused on events in Washington after weekend talksbetween Republicans and Democrats showed some progress butfailed to remove the risk of a possible U.S. default in threedays, pressuring stocks.

All ten sectors on the S&P were down. The S&P financialsector index and S&P utilities index wereamong worst decliners, down 0.5 percent and 0.9 percent,respectively.

The lack of a definitive agreement was putting pressure onequities as there were no guarantees an historic debt defaultwould be avoided. In addition, the government shutdown, enteringits third week, was seen as a drag on the economy.

Senate Majority Leader Harry Reid and Republican leaderMitch McConnell held talks that Reid later called "substantive."Reid did not provide details, but his remarks gave some hopethat Congress soon might pass legislation to fund the governmentand raise its borrowing authority.

Both the Senate and House are scheduled to be in session onMonday, even though it is the Columbus Day federal holiday. Noeconomic data and major earnings were due for Monday.

"Time is fast running out, and as we noted last week, it mayyet take a market storm for prudence to prevail," said AndrewWilkinson, chief economic strategist at Miller Tabak & Co in NewYork.

Also pressuring the market was trade data from China, which showed an unexpected decrease in exports in September for theweakest performance in three months. Another set of data showedChinese consumer prices rose faster than expected in September.

The Dow Jones industrial average was down 73.66points, or 0.48 percent, at 15,163.45. The Standard & Poor's 500Index was down 8.33 points, or 0.49 percent, at1,694.87. The Nasdaq Composite Index was down 16.13points, or 0.43 percent, at 3,775.74.

In company news, Netflix Inc shares rose 2.9percent at $309.60 after the Wall Street Journal reported thatit is in talks with several U.S. cable television companies,including Comcast Corp and Suddenlink Communications to make itsstreaming video service available through their set-top boxes.

Expedia Inc shares were off nearly 8 percent at$47.90 after a rating cut by Deutsche Bank AG.

Major companies will resume reporting third-quarterearnings. On Tuesday earnings are expected from Citigroup Inc, Coca-Cola Co, Johnson & Johnson, and IntelCorp.

U.S. stocks had risen strongly ahead of the weekend on hopesa deal to raise the $16.7 trillion federal borrowing limit wasnear. Failure to raise the debt ceiling would leave the world'sbiggest economy unable to pay its bills in the coming weeks.

International Monetary Fund managing director ChristineLagarde, speaking in Washington, warned of "massive disruption"to the global economy if the U.S. debt ceiling, which will bereached on Thursday, was not lifted.

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