Wall Street didn't show much holiday spirit Monday as the major U.S. indexes slipped on fears concerning the fiscal cliff stalemate.
The talks were off with the two key negotiators, U.S. President Barack Obama and House of Representatives Speaker John Boehner, out of Washington for the holidays.
But some U.S. lawmakers expressed concerns on Sunday that the country would go over the cliff, and a number of Republicans said that that was Obama's goal.
Going over the cliff would mean $600 billion in tax hikes and spending cuts that could tip the U.S. economy into recession next year.
Congress and the President are expected to return to Washington on Thursday. They have until January 1st to work out a deal.
The debate over the fiscal cliff put a damper on the consumers' confidence to open their wallets for last-minute shopping, and discounts were not as deep as last year.
Trading volume in New York was muted, with U.S. equity markets closing at 1 p.m. ahead of the Christmas holiday on Tuesday. The Dow Jones industrial average closed lower, as did the S&P 500 and the Nasdaq.
A number of European markets operated on a shortened session, with other markets closed entirely.
Analysts said that given the volume, any news, or rumors from Washington could cause a spike in volatility later in the week.
Santa slump for stocks (1:22)
Dec. 24 - Summary of business headlines: Fiscal cliff worries sent U.S. stocks down and put a damper on holiday shopping. Bobbi Rebell reports. ( Transcript )