Stocks fell in light trading Monday during a shortened holiday trading session with lawmakers running out of time to reach a budget deal that would prevent the U.S. from going over the so-called fiscal cliff.
The Dow Jones industrial average fell 52 points to 13,139.08. The Standard & Poor's 500 index gave up 3 points to 1,426.66. The Nasdaq composite slipped 8.4 points to 3,012.60.
In more than a dozen interviews with The Associated Press, conservative activists said they would rather see the country fall off the cliff than agree to any tax increases for any Americans, no matter how wealthy.
With many in Washington away for the holidays, that scenario appears increasingly likely.
"There is starting to become a little bit of an acceptance that we fall off the fiscal cliff," said JJ Kinahan, chief derivatives strategist for TD Ameritrade. "People are starting to think about how they may plan their portfolio if that does happen."
Stocks fell sharply Friday, with the Dow logging its biggest drop in more than a month, after House Republicans called off a vote on tax rates. That left federal budget talks in disarray just days before sweeping tax increases and government spending cuts are scheduled to take effect.
President Barack Obama and Congress are on a short holiday break. Congress is expected to be back at work Thursday, and Mr. Obama will be back in the White House after a few days in Hawaii.