US stocks were sharply lower Friday amid doubts that a deal on the "fiscal cliff" will be reached by an end-of-year deadline.
The Dow Jones Industrial Average sank 147.08 points (1.1 percent) at around 1630 GMT.
The broad-market S&P 500 dipped 16.23 points (1.12 percent) at 1,427.46, while the tech-rich Nasdaq Composite lost 38.02 points (1.25 percent) at 3,012.36.
Washington has until the end of the year to stop the United States from going over the so-called fiscal cliff, a mix of tax hikes and spending cuts that experts say could drag the world's biggest economy into recession.
Late Thursday, a Republican plan to let tax breaks expire on US millionaires collapsed when it failed to earn enough party support, leaving talks in limbo.
Early Friday, Republican leaders said they were not walking away from negotiations but a compromise remains elusive.
Friday's market action came "amid waning optimism a fiscal cliff resolution can be reached before the New Year," said analysts with Charles Schwab & Co.
Concern about the fiscal cliff appeared to overshadow an uptick in consumer spending, the key driver of the US economy.
Personal consumption expenditures (PCE) climbed 0.4 percent while personal income rose 0.6 percent, the Commerce Department said.
Stocks in focus included media conglomerate News Corp., which said Friday it had filed a document with US regulators detailing its split into two independent companies. It lost 1.6 percent.
Investors were also eyeing General Electric, down 1.3 percent, which announced it would buy the aviation activities of Italian engine maker Avio for $4.3 billion.
ConocoPhillips was down 1.1 percent. Late Thursday, the Houston-based energy giant said it had agreed to sell its Nigerian operations to growing African group Oando for $1.79 billion.
On Thursday, the Dow finished up 0.45 percent, while the S&P 500 gained 0.55 percent and the Nasdaq climbed 0.20 percent.
Bond prices rose. The 10-year US Treasury yield dipped to 1.75 percent from 1.80 percent late Thursday, while the 30-year fell to 2.93 from 2.98. Bond prices and yields move inversely.