TIMOTHY GEITHNER

Stocks were set for a lower open on Monday as political brinkmanship in Washington over the debt ceiling sparked fears of a U.S. rating downgrade, sending world equities lower and pushing gold to a record high.

Stock index futures fell on Monday as political brinkmanship in Washington over the debt ceiling sparked fears of a U.S. rating downgrade, sending world equities lower and pushing gold to a record high.

Less than 9 days remain before the U.S. Government defaults on is debt, and the debt impasse continues. So far, institutional investor patience has been remarkable, as Asian markets were relatively calm in Monday trading. But how long can that last, if Washington remains gridlocked?

Stock index futures fell sharply on Monday as political brinkmanship in Washington over the U.S. debt ceiling sparked fears of a U.S. rating downgrade, sending world equities lower and pushing gold to a record high.

Stock index futures dropped on Monday as a political impasse in Washington's debt ceiling talks fueled worries of a U.S. default, knocking world equities lower and pushing gold to a record high.

President Barack Obama and Congressional leaders have missed a self-imposed Sunday deadline reach a deal to raise the U.S. federal debt limit, bringing the default deadline for U.S. obligations even closer.

As time marches towards August 2, the day the US would presumably default if the debt ceiling isn't raised, calls are growing louder and louder for a resolution.

With financial markets on edge, White House officials and Republican leaders scrambled to reassure them that the United States will avert default and lift its $14.3 trillion borrowing limit before August 2.

U.S. Treasury Secretary Timothy Geithner Sunday reiterated his call for Congress to increase the debt limit immediately, underscoring that a delay may roil financial markets beginning as early as Monday. Geithner also said a default by Congress would jeopardize 80 million federal payments/checks per month.

President Barack Obama said Friday that time for negotiations had ended after House Speaker John Boehner broke off talks on reaching a deal to raise the federal debt limit and handle the United States' long term debts and deficits.

President Barack Obama, D-Ill. and Speaker John Boehner, R-Ohio moved closer toward a landmark debt deal late Thursday -- one that would avoid a U.S. default and implement major tax code changes, if approved. However, aides to both were lowering expectations, given the importance of the talks, so as to not jeopardize delicate negotiations within each caucus.

New York Federal Reserve Bank President William Dudley received a waiver allowing him to keep investments in firms the Fed was rescuing at the height of the financial crisis when he was a top staffer, a congressional watchdog agency found.

Despite no evidence that a debt deal was imminent, House Speaker John Boehner, R-Ohio, reiterated that he would not allow a default by the U.S. Government on his watch.

President Barack Obama will decide on Saturday whether to summon lawmakers for a new round of debt and deficit talks, weighing the chances of progress as both sides stick to their positions on spending and taxes.

The International Monetary Fund on Thursday called for a greater sense of urgency to address the Greek debt crisis and warned Europe it was taking too long to repair its banking system in the face of growing risks of contagion.