The possible failure of negotiations aimed at slashing the massive U.S. debt discouraged investors Monday.

In early U.S. trading, stocks were off around 2 percent. European shares were hit a bit harder, and Asian stocks lost somewhat less.

News from the troubled U.S. housing sector was more positive.

The National Association of Realtors says home sales rose 1.4 percent in October. The report covers previously-owned homes, which make up the largest part of the market. If sales continue at October's rate for a full year, just under 5 million homes would change hands.

Severe problems in the housing market helped cause the financial crisis, and home prices have been falling since then.

A combination of low prices and low interest rates are helping the market recover slightly.

Tuesday, government experts are expected to report that U.S. economic growth continued at a modest pace.