Wall Street cuts losses, ends down as debt vote looms

The S&P 500 fell for a sixth day as time runs out for the government to pass a deal to avoid default and the economy showed further signs of stalling. The market pared losses late in the day before Congress was expected to vote on Monday on a debt deal backed by the White House, which includes spending cuts of $2.4 trillion over 10 years.

European stocks fell sharply as weak US manufacturing data added to worries about a slow recovery for the world's biggest economy, more than offsetting optimism the United States would avert a disastrous debt default.

The FTSEurofirst 300 index of top European shares fell 1.3 percent to 1,067.97 points, the lowest close in two weeks, and only just above its low for 2011, 1,065.72. Volumes were high, at 125 percent of the 90-day average for the index.

The Nikkei stock average climbed back above 10,000 at one point, the first time in three days, helped by short-covering and futures-led buying after top US lawmakers reached an agreement to reduce the deficit and avoid a default.

The benchmark Nikkei rose as high as 10,040.13, though later gave up some gains to close up 1.3 percent at 9,965.01. The broader Topix index gained 1.2 percent to 851.70.