The Nasdaq fell 2 percent while the Dow and S&P 500 extended losses on Tuesday as worries about the economy outweighed relief over enactment of a law avoiding a U.S. default.

The Dow Jones industrial average was down 167.33 points, or 1.38 percent, at 11,965.16. The Standard & Poor's 500 index was down 22.21 points, or 1.73 percent, at 1,264.73. The Nasdaq Composite Index was down 50.84 points, or 1.85 percent, at 2,693.77, after falling as much as 2 percent.

(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)