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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> NEW YORK (AP) — Stock futures fell Monday after congressional leaders failed to agree on a deal to raise the nation’s debt limit.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> Lawmakers hoped to reach a compromise late Sunday, but those talks stalled. President Barack Obama wants to raise revenues by letting tax cuts for wealthy Americans expire. Republicans have pushed for more spending cuts and have rejected higher taxes.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> If an agreement is not reached, the U.S. is at risk of defaulting on its debt after Aug. 2. That could have a catastrophic impact on the global financial markets. The U.S. would likely lose its coveted triple-A credit rating. Interest rates would rise for millions of consumers. And stocks could fall the way they did during the 2008 financial crisis, analysts say.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> Most investors still think that scenario is a long way off. The White House and Capitol Hill are expected to come up with a last-minute deal to raise the $14.3 trillion borrowing limit. But, even so, there are uncertainties over the possibility for higher taxes and spending changes that could affect corporate profits.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> Ahead of the opening bell, Dow Jones industrial average futures are down 84 points, or 0.7 percent, at 12,537. Standard & Poor’s 500 futures are down 10, or 0.7 percent, at 1,331. Nasdaq 100 futures are down 13, or 0.6 percent, at 2,415.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> Bond prices are falling, pushing yields higher. The yield on the 10-year Treasury note rose to 3.02 percent from 2.96 percent late Friday.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> Gold and silver prices edged up as investors looked for relatively safe places to put their money. Gold rose $13 to $1,614.50 an ounce, while silver rose 34 cents to $40.48 an ounce. Gold has risen 14 percent this year, while silver is up 31 percent.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> European stocks were little changed even after Moody’s further downgraded Greece’s bond ratings. The credit ratings agency warned that it is almost inevitable the country will default on its debts following a new bailout plan approved by European leaders last week.
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“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”> In corporate news, Kimberly-Clark fell 1 percent after the maker of Kleenex tissues and Huggies diapers said its second-quarter profit fell by 18 percent as a result of higher prices for its raw materials and an increased tax rate.
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