NEW YORK (December 3, 2012)—Stocks closed lower Monday on Wall Street after a surprisingly weak manufacturing report heightened concerns that the fiscal deadlock in Washington is already hurting the economy.

The Dow Jones industrial average lost 60 points to close at 12,965 Monday.

The Standard and Poor's 500 index fell seven points to end the day at 1,409.

The Nasdaq fell eight points to close at 3,002.

The market opened higher, but turned down at midmorning after the Institute for Supply Management reported that U.S. manufacturing shrank last month.

Businesses expressed concerns about a series of sharp government spending cuts and tax increases that kick in next year unless a budget deal is reached in Washington.

Three stocks fell for every two that rose on the New York Stock Exchange where volume was lighter than the recent average at 3 billion shares.