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"Investors have become, unfortunately, accustomed to some of the dysfunction," said Eric Wiegand, a senior portfolio manager at U.S. Bank. "It's become more the norm than the exception." In the summer of 2011, the S&P 500 index plunged 17 percent between early July and early August as lawmakers argued over raising the debt limit, and Standard & Poor's cut the U.S. credit rating from AAA, its highest ranking. The market later recovered. Stocks also slumped in the last two weeks of 2012 as investors fretted that the U.S. could go over the "fiscal cliff" as lawmakers argued over a series of automatic government spending cuts. Stocks rebounded and began a strong rally that has propelled the S&P 500 up almost 21 percent this year. Some were glad that investors could now turn their focus back to the traditional drivers of the market rather than worrying whether the latest dispatch from Washington would shake stocks. "It's a little bit silly in the short term for markets to go down so much on press conferences and then to go up so much on rumors," said Brad Sorensen, director of market and sector research at the Schwab Center for Financial Research. "We've urged investors to pull back a little bit and look at the longer term." The market for U.S. Treasury bills reflected relief among bond investors. The yield on the one-month T-bill dropped to 0.13 percent from 0.40 percent Wednesday morning, an extraordinarily large move. The decline means that investors consider the bill, which would have come due around the time a default may have occurred, to be less risky. The yield on the 10-year Treasury note edged down to 2.67 percent from 2.74 percent Tuesday. Yields on longer-term U.S. government debt haven't moved as much as those on short-term debt because investors believed that the government would work out a longer-term solution. Among stocks making big moves: Bank of America rose 32 cents, or 2.2 percent, to $14.56 after the second-largest U.S. bank reported a surge in third-quarter earnings. Stanley Black & Decker plunged $12.70,
or 14.3 percent, to $76.75 after the company lowered its profit
forecast for the year, citing slower growth in emerging markets
and a hit from the U.S. government shutdown.
[Associated
Press;
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