NEW YORK (MarketWatch) -- U.S. stocks fell to their lowest levels of the session Tuesday as investors worried about the health of the economic recovery, even after the Senate approved the debt-ceiling bill and avoided a potential government default.
"The recent round of economic data has been disappointing," said Fred Dickson, chief investment strategist at Davidson Cos., pointing to a "small but growing risk that the economy might slide back into a very shallow recession."
Helping foster such fears, the Commerce Department reported consumers trimmed their spending in June for the first time in almost two years.
Extending its longest losing streak in more than a year, the Dow Jones Industrial Average (DJI) dropped 158.58 points, or 1.5%, to 11,951.91. It touched a low of 11,941.85 after the Senate vote.
The Standard & Poor's 500 Index (SPX) fell 23.04 points, or 1.8%, to 1,263.90.
The Nasdaq Composite Index (RIXF) declined 50.26 points, or 1.9%, to 2,693.35.
For every stock advancing, three fell on the New York Stock Exchange, where 632 million shares traded as of 2 p.m. Eastern.
Just hours before a potential default on the nation's debt obligations, the Senate on Tuesday approved legislation that would increase the U.S. debt ceiling and reduce planned budget deficits.
Following the vote, Fitch Ratings said that, with a deal in place to increase the U.S. debt ceiling, any risk of sovereign default -- "commensurate with [the U.S.'s] 'AAA' rating" -- remains extremely low.
Copyright © 2011 Dow Jones Newswires
