US stocks have closed lower as market sentiment soured less than two weeks before the United States risks going over the so-called fiscal cliff.

The Dow Jones Industrial Average slumped 99.14 points, or 0.74 per cent, to 13,251.82 in closing trade.

The broad-market S&P 500 dropped 10.98 points, or 0.76 per cent, at 1,435.81, while the tech-rich Nasdaq Composite lost 10.17 points, or 0.33 per cent, to 3,044.36.

Washington has until the end of the month to reach a deal to avert the fiscal cliff, a series of tax hikes and spending cuts that are due to take effect in January and could plunge the world’s biggest economy into recession.