Stocks opened lower on Wall Street as concerns about the government’s finances intensified, offsetting a report that retail sales rose in December.

The Dow Jones industrial average fell 32 points to 13,475 as of 10:26 a.m. EST. The Standard and Poor’s 500 dropped five points to 1,466, the Nasdaq Composite index fell 21 points to 3,099.

Apple fell $12 to $490, its third daily drop. The stock hasn’t closed below $500 in almost a year. Apple slumped 3.6 percent Monday on concern that demand for its iPhone 5 is slowing.

Concern about the state of government’s ability to borrow may also be starting to weigh on investors’ minds.

Treasury Secretary Timothy Geithner told congressional leaders in a letter late Monday that the U.S. government will reach its borrowing limit as soon as mid-February, earlier than expected.

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Treasury prices rose on Tuesday, pushing long-term yields down to their lowest levels of the year, aided by concerns about the coming U.S. fiscal battle and renewed confidence of the Federal Reserve’s support.

Yields on 10-year notes , which move inversely to prices, fell 3 basis points to 1.82%. They haven’t closed below that level since Dec. 31, according to FactSet.

A basis point is one one-hundredth of a percentage point.

Yields on 30-year bonds declined 4 basis points to 3%, also the lowest level since 2012.

Five-year yields fell 3 basis points to 0.74%, still the lowest this year.

Late Monday, Fed Chairman Ben Bernanke reiterated his concerns about continually high unemployment and downplayed worries about inflation, reinforcing expectations that the central bank will continue its bond-purchase program (sometimes called quantitative easing) for some time to come. Read: Bernanke downplays inflation risk of QE3.

He also noted the need for Washington lawmakers to find long-term solutions to the country’s deficit problems without threatening the nascent economic recovery.

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The number of investors who are bullish on U.S. Treasuries rose to the highest level in two months due to worries about a protracted fight in Washington over raising the debt ceiling, a survey released on Tuesday showed.

Investors seemed more concerned right now about another political standoff that hurts risk appetite, analysts said.

The United States scraped up against its $16.4 trillion debt ceiling on Dec. 31 and is now employing special measures to meet its financial obligations. The Treasury Department said those steps could be exhausted by mid-February. [ID: nL2N0AJDXD]

The prospect of no agreement on raising the debt ceiling could lead to scenarios including a default on U.S. bonds and downgrades of its credit rating, which then would reduce the longer-term appeal of Treasuries, analysts said.

But as of Monday, when J.P. Morgan Securities conducted its latest weekly Treasury client survey, the share of investors who were “long”, or holding more Treasuries than their benchmarks, was 21 percent, rising from 19 percent the previous week.

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Retail sales rose more than expected in December as Americans shrugged off the threat of higher taxes and bought automobiles and a range of other goods, suggesting momentum in consumer spending as the year ended.

Elsewhere, wholesale prices remained tame, while a gauge of manufacturing in New York again showed weakness.

The Commerce Department said on Tuesday retail sales increased 0.5 percent after an upwardly revised 0.4 percent rise in November. Sales in November were previously reported to have gained 0.3 percent.

Economists polled by Reuters had expected sales to rise only 0.2 percent. Sales were up 4.7 percent from December 2011 and rose 5.2 percent for the whole of 2012.

So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, increased 0.6 percent after advancing 0.5 percent in November.

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Wal-Mart Stores Inc. said on Tuesday it will buy an additional $50 billion in U.S.-made products over the next decade in such areas as sporting goods and high-end appliances in a bid to help boost the U.S. economy.

Wal-Mart, the largest private employer and retailer in the United States, also said it plans to hire 100,000 new veterans over the next five years, at a time when the U.S. unemployment rate remains well over 7 percent.

The moves are likely to receive a cool reception from critics who claim Wal-Mart does not pay its workers enough and should be taken to task for selling too many goods made overseas in lower-cost countries such as China.

Issues such as last year’s deadly fire at a factory in Bangladesh that was making clothing for retailers including Wal-Mart have also brought ethical sourcing into the spotlight.

Walmart U.S. Chief Executive Bill Simon laid out the plan at the National Retail Federation’s (NRF) annual conference in New York.

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Stocks opened lower on Tuesday as investors fretted over the debate brewing in Washington over raising the U.S. borrowing limit as well as what is expected to be a lackluster earnings season.

The Dow Jones industrial average .DJI dropped 54.83 points, or 0.41 percent, to 13,452.49. The Standard & Poor’s 500 Index .SPX lost 5.26 points, or 0.36 percent, to 1,465.42. The Nasdaq Composite Index .IXIC fell 15.85 points, or 0.51 percent, to 3,101.68.

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The United States could lose its top credit rating for the second time from a leading agency if there’s a delay in raising the country’s debt ceiling, Fitch Ratings warned Tuesday.

Congress has to increase the country’s debt limit, which effectively rules how much debt the U.S. can have, by March 1 or face a potential default. There are fears that the debate will descend into the sort of squabbling and political brinkmanship that marked the last effort to raise the ceiling in the summer of 2011. The U.S. Treasury Department warned then that it had nearly reached a point where it would be unable “to meet our commitments securely.”

“The pressure on the U.S. rating, if anything, is increasing,” David Riley, managing director of Fitch Ratings’ global sovereigns division said at a London conference. “We thought the 2011 crisis was a one-off event …. if we have a repeat we will place the U.S. rating under review.”

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Boeing Co (BA.N) said it will cut a little more than 40 percent of jobs, or 160 positions, at its El Paso plant as it looks to reduce the impact of planned U.S. defense budget cuts.

The company said it will reduce occupied square footage 50 percent at the plant by moving from three buildings to one. The plant in Texas manufactures electronics for a variety of Boeing products.

The reductions will be completed by the end of 2014, the company said.

Boeing announced a major restructuring of its defense division in November that would cut 30 percent of management jobs from 2010 levels, close facilities and consolidate several business units.

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Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank’s easy monetary policy, in comments suggesting Fed Chairman Ben Bernanke may face more dissent this year.

In remarks that stamped her as a hawk on the Fed’s policy-setting committee, Kansas City Federal Reserve President Esther George warned that the Fed’s near-zero interest-rate policy – aimed at boosting the economy – could spark inflation.

“A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the 2 percent inflation goal in the future,” she said in her most extensive remarks in a year on policy.

“Monetary policy, by contributing to financial imbalances and instability, can just as easily aggravate unemployment as heal it,” she said in a speech in Kansas City.

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Chesapeake Energy Corp (CHK.N), the U.S. oil and gas company battling a governance crisis and financial strain, said on Monday its chief executive officer, Aubrey McClendon, will not receive a bonus for 2012.

The board, in a filing to regulators, said it made several changes to the company’s corporate governance structure and executive pay. The company said McClendon recommended he not receive a bonus.

Other actions taken include deep cuts to incentive pay, a ban on personal jet travel for top executives other than McClendon, and measures to increase shareholder influence.

Last year was rough for Chesapeake and McClendon. The company faced both a liquidity crisis brought on by low natural gas prices and heavy spending and a governance crisis that resulted in big shareholders effectively taking control of the board of directors in June.

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