* U.S. debt default looms as lawmakers remain divided * Dollar hits fresh record low versus Swiss franc * U.S., European stocks fall (Updates prices, adds comment, details, changes dateline, previous LONDON) NEW YORK, July 26 (Reuters) - The U.S. dollar fell broadly on Tuesday as U.S. lawmakers remained deadlocked over raising the nation's debt ceiling to avoid a devastating default, while U.S. and European shares also declined. Unless lawmakers reach a deal to raise the $14.3 trillion ceiling by Aug. 2, the United States faces a technical default on some of its $9.6 trillion government bonds outstanding. In a televised address, President Obama warned that this would be a "reckless and irresponsible outcome," but he gave no indication that a compromise was imminent. For more, see [ID:nN1E76N0CA] Weakness in stocks weighed on crude oil prices, while gold hovered near a record high hit in the previous session as investors looked to the precious metal for safety. The U.S. currency hit a record low against the Swiss franc of 0.7997 on trading platform EBS and fell to a four-month low near 77.883 yen , approaching a record low of 76.25 set in March. "The market is getting more nervous about the debt ceiling issue," said You-Na Park, currency strategist at Commerzbank in Frankfurt. "If the market was really starting to price in the possibility of a default, the dollar would be losing more than what we saw this morning." Against a basket of currencies, the dollar <.DXY> fell 0.5 percent. The euro rose 0.6 percent to $1.4462 . U.S. stocks fell in early trading, the Dow Jones industrial average <.DJI> was down 76.67 points, or 0.61 percent, at 12,516.13. The Standard & Poor's 500 Index <.SPX> was down 4.95 points, or 0.37 percent, at 1,332.48. The Nasdaq Composite Index <.IXIC> was down 4.88 points, or 0.17 percent, at 2,837.92. Stocks were pressured by weakness in 3M Co and United Parcel Service Inc , which both reported earnings. World stocks as measured by MSCI world equity index <.MIWD00000PUS> rose 0.3 percent, while emerging stocks <.MSCIEF> rose 0.8 percent. European stocks fell 0.6 percent <.FTEU3> after weaker-than-expected results from BP and UBS . Investors so far appear to have done little to prepare for a default or a cut in the U.S. triple-A credit rating. While they say lawmakers will eventually reach a deal, it is nearly impossible to insure against what is considered a low-probability event, especially given the lack of alternatives and the depth of the market. The cost of insuring the United States against default stood around 57 basis points , nearly half the March 2009 peak. The credit default swap curve is nearly flat with one-year CDS at 57.7 bps. This in itself reflects investor jitters, but it is not the kind of pricing normally seen when investors expect an imminent default. U.S. Treasury prices rose as investors dipped their toes back into bonds after recent losses spurred by the default fears. The benchmark 10-year note last traded up 8/32 in price for a yield of 2.97 percent. Bund futures rose 13 ticks. Spanish and Italian government bonds fell after concerns rose over whether a new bailout plan for Greece would stop sovereign debt problems from spreading to other countries. In the commodities market, U.S. crude fell $1.20 to $98 a barrel. Spot gold last traded around 1,611 an ounce. "Clearly there are substantial tail events to hit the market, so the appeal of gold will still be very strong," said Michael Lewis, head of commodity research at Deutsche Bank. (Additional reporting by Natsuko Waki and Harpreet Bhal in London, and Gertrude Chavez-Dreyfuss and Angela Moon in New York; Editing by Padraic Cassidy)

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