Wall Street slumps on rising US default concerns

NEW YORK - US stocks took a big hit Monday as investors grew more worried about a possible debt default in Washington, D.C..

The Dow Jones Industrial Average dropped 136.34 points, or 0.90 percent, to 14,936.24 points. The Standard & Poor's 500-stock Index slid 14.38 points, or 0.85 percent, to 1,676.12 points. The Nasdaq Composite Index plunged 37.37 points, or 0.98 percent, to 3, 770.38 points.

The market took a dive in the final trading hour of the session as investors are growing more concerned about the US fiscal gridlock, which also pushed most of stocks outside the United States into negative territory Monday, as the country's debt ceiling deadline is looming.

"If the United States government, for the first time in its history, chooses not to pay its bills on time, we will be in default," warned US Treasury Secretary Jacob Lew in a television interview aired on CNN's "State of the Union" Sunday.

The federal government shutdown dragged on into the second week with little sign of progress in budget negotiations in Congress.

US House Speaker John Boehner said Sunday that the lower chamber would not pass bills to end the government shutdown or raise debt limit until President Barack Obama chooses to negotiate.

However, Obama has urged lawmakers to reopen the government and raise the debt limit with no conditions attached.

On the economic front, US consumer credit rose at an annual rate of 5.4 percent to 3.04 trillion US dollars in August, according to the US Federal Reserve, beating market consensus.

Meanwhile, with the third-quarter earnings reports season set to kick in, analysts said continued fiscal bickering may overshadow the influence of the earnings season.