Markets were roiled in the summer of 2011 as lawmakers haggled over an increase to the debt limit. The dispute cost the U.S. its AAA ranking from the credit-rating firm Standard and Poor's.
The U.S. fiscal crisis is still the biggest single individual risk facing investors, with 37 percent of investors naming it as the biggest worry, according to a survey of fund managers published by Bank of America Merrill Lynch Tuesday. The European debt crisis was cited as the biggest concern by 23 percent of those polled and a “hard landing” for the Chinese economy was third on the list with 12 percent.
Apple fell $15.83, or 3.2 percent, to $485.92, closing below $500 for the first time in almost a year. Apple slumped 3.6 percent Monday on concern that demand for its iPhone 5 is slowing. Nomura analysts today lowered their target price for the stock to $530 from $660 and cut their estimates for iPhone sales this year.
Both the S&P 500 and the Dow are up on the year, having surged in the first week of January after lawmakers reached a last-minute budget deal to stop the economy going over the “cliff.” The agreement prevented a series of tax increases and spending cuts that could have pushed the U.S. economy back into recession, according to economists.
Optimism about the outlook for global growth has also boosted stocks.
The S&P 500 is up 3.2 percent this year. The 30-member Dow is up 3.3 percent since the start of 2013.
The yield on the 10-year Treasury note, which moves inversely to its price, was little changed at 1.84 percent.