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US Markets Fall on Federal Budget Worries

U.S. stock markets closed lower Monday as investors worried about a budgetary impasse in Washington that threatened to partially shut down the federal government beginning Tuesday.

Hopes were fading that Congress can reach a last-minute deal and pass a stopgap budget measure to beat a midnight deadline.

President Barack Obama has warned that a freeze in non-essential federal spending could have catastrophic effects on the shaky economic recovery, and could cost thousands of jobs.

If the deadline expires without a deal, the failure will have a global impact. Oil prices slid and European and Asian shares fell, amid fears for the world's largest economy.

On Wall Street, the Dow Jones industrial average, the S&P 500, and the Nasdaq Composite were lower.

Earlier, European stock markets slid after large losses in Tokyo, as investors fretted over the U.S. and political uncertainty in Italy.

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