* Five days left before Obama deadline for debt deal
* Halliburton's quarterly profit soars
* News Corp drops after former top exec arrested
* Indexes down: Dow 1.1 pct, S&P, Nasdaq both 1 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to midmorning)
By Ryan Vlastelica
NEW YORK, July 18 (Reuters) - U.S. stocks fell about 1 percent on Monday, with no deal in sight on raising the U.S. debt ceiling and investors fretting over continued fiscal problems in Europe.
An expected strong earnings season could fuel optimism,
even though encouraging results from Google Inc
With five days remaining before U.S. President Barack Obama's deadline for a deal to raise the government's debt ceiling, Republicans and Democrats scrambled to work out details on a fallback plan that would avoid an unprecedented U.S. default. For details, see [ID:nN1E76G06R] and [ID:nUSBUDGET]
"The fact that the U.S. debt issue is coming at the same time as Europe heightens investor concerns. It's hard to say whether we've reached the bottom yet," said Paul Nolte, managing director at Dearborn Partners in Chicago.
The Dow Jones industrial average <.DJI> was down 134.42 points, or 1.08 percent, at 12,345.31. The Standard & Poor's 500 Index <.SPX> was down 12.79 points, or 0.97 percent, at 1,303.35. The Nasdaq Composite Index <.IXIC> was down 27.40 points, or 0.98 percent, at 2,762.40.
Confusion over competing policy proposals reigned among officials and bankers as Europe struggled to put together a second bailout of Greece and prevent the region's debt crisis from spreading. [ID:nL6E7II0FP]
In U.S. corporate news, Halliburton Co
Second-quarter earnings for S&P 500 companies are seen rising 6.5 percent, and of the 39 companies in the S&P that have reporting so far, 74 percent posted higher-than-expected profits, according to Thomson Reuters Proprietary Research.
"It remains to be seen whether earnings will be enough to trump the debt issues," Nolte said. "Based on last week's trading action, maybe not."
Media and entertainment group News Corp
European equities added to last week's losses on Monday, led lower by bank shares. The FTSEurofirst 300 <.FTEU3> index of top shares fell 1.5 percent, while the Stoxx Europe 600 banking index <.SX7P> lost 1.6 percent.
Results from the region's regulatory stress tests failed to
ease worries over any potential impact from the region's
sovereign debt crisis. U.S.-listed shares of Barclays Plc
U.S. banks were down as well. Bank of America Corp