The benchmark index dropped as much as 0.8 percent after Senate Majority Leader Harry Reid rejected a House plan to halt the fiscal impasse and Senate leaders stopped talks on a bill that would fund the government through Jan. 15, 2014, and suspend the U.S. debt limit until Feb. 7. The Senate talks haven’t broken down, spokesmen for the chamber’s top leaders said.
The House plan, which Majority Leader John Boehner is still developing, contains policy conditions Democrats have previously rejected. The federal government shutdown is in its 15th day and U.S. borrowing authority will lapse Oct. 17.
The House plan, which Republican leaders presented to their members this morning, “can’t pass the Senate and won’t pass the Senate,” Reid, a Nevada Democrat, said on the floor today. Reid and Minority Leader Mitch McConnell of Kentucky had been closing in on an agreement.
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