July 24, 2011 10:39:58 PM
* U.S. stock futures drop as debt deal elusive * Markets have seesawed on signs of progress, inaction * Boehner tells Republicans no deal likely with Obama (Adds gold, quote, updates details, prices)
By David Gaffen
NEW YORK, July 24 (Reuters) - Wall Street futures fell, the U.S. dollar dropped and gold rallied as Washington appeared no closer on Sunday to raising the U.S. debt ceiling to avert a devastating default.
The decline in futures points to a poor open for U.S. markets and shows investors are getting increasingly worried about the failure of legislators to coalesce around one approach. "The fact that they seem to be jumping from one type of proposal to another and not converging on anything is beginning to worry markets," said Steven Englander, head of G10 FX strategy at Citigroup. S&P 500 futures fell at the open of electronic trading. The benchmark S&P was down 0.9 percent, or 12 points, at 1,328.70. Early currency trading suggested a move away from the U.S. dollar, with the biggest drop in the greenback coming against the Swiss franc. In early Asian trading, the dollar dropped to 0.8132 against the Swiss franc, down 0.7 percent. In commodities trading, gold futures rose to $1,610 an ounce, up $8.70, a new record for the precious metal. White House officials and Republican leaders scrambled on Sunday to reassure global markets the United States would avert a debt default, but the two sides were still not close to a deal. House Speaker John Boehner told fellow Republicans on a conference call that a large-scale debt deal was not possible with President Barack Obama. An aide to U.S. Senate Majority Leader Harry Reid told Reuters on Sunday the Nevada senator was outlining a plan that would cut $2.5 trillion in spending and increase the debt limit that he hoped would be brought to the Senate floor this week. Earlier in the day, White House Chief of Staff Bill Daley warned that there would be a "few stressful days" ahead for financial markets. "There's an old saying that things don't matter until the day they matter; we're getting close to the day when it will matter," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. In the past few days, markets seesawed on reports suggesting progress toward an agreement to cut the deficit that would allow for the U.S. debt ceiling to be raised and avert a market-roiling default. (Editing by Dale Hudson)
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