U.S. Stocks Drop As Debt Debate Continues

NEW YORK, Jul. 27 -- U.S. stocks dropped on Tuesday as market sentiment was under pressure in the face of ongoing uncertainty about U.S. debt talks.

Two parties gave competing plans on Monday, trying to avoid tossing the market into chaos with a default, however, a resolution still appears a long way off.

Republicans pushed for a two-step plan that would allow the federal debt limit to immediately be raised by about one trillion dollars while Democrats called the proposal a "non-starter" and said they would advance their own plan to reduce the deficit by 2. 7 trillion dollars and raise the debt ceiling until after next year's elections.

U.S. President Barack Obama showed his support for the Democrats' plan in his national television address, saying default is "reckless and irresponsible" and he is confident the compromise can be reached in time.

On earnings front, Broadcom Corp surged nearly 10 percent after it reported strong results on Monday night, making technology stocks again shine in the market.

The Dow Jones industrial average lost 91.50 points, or 0.73 percent, to 12,501.30. The Standard & Poor's 500 was down 5.49 points, or 0.41 percent, to 1,331.94. The Nasdaq Composite Index slipped 2.84 points, or 0.10 percent, to 2, 839.96.