PAMELA SAMPSONBANGKOK (AP) â¿¿ Asian stock markets tumbled Thursday after a ratings agency threatened to downgrade the U.S. if a solution to the so-called fiscal cliff isn't negotiated among lawmakers and newly re-elected President Barack Obama. If a deal isn't reached by Jan. 1, tax increases and government spending cuts to the tune of $800 billion automatically take effect. Some economists say such a withdrawal of fiscal stimulus has the potential to throw the world's biggest economy back into recession. Hours after Obama defeated Republican challenger Mitt Romney in a cliffhanger election, Fitch Ratings said that the U.S. government's top 'AAA' rating would be at risk if Congress and the president did not immediately forge an agreement to avoid the fiscal cliff. "There are fears that US lawmakers will repeat the same political divisiveness over key fiscal issues that led Standard & Poor's to remove America's triple-A debt rating in August 2011," said analysts at DBS Bank Ltd. in Singapore in a market commentary. Japan's Nikkei 225 index shed 1.7 percent to 8,822.15. The government reported that seasonally adjusted private-sector machinery orders, excluding volatile orders for ships and utilities, fell 4.3 percent in September. Hong Kong's Hang Seng lost 1.4 percent to 21,790.50. South Korea's Kospi dropped 1.3 percent to 1,913.68. Australia's S&P/ASX 200 was 0.8 percent lower at 4,479.60. Benchmarks in Singapore, Taiwan, Indonesia and mainland China all fell 1 percent or more. Another blow to investor confidence stems from corporate America's less-than-stellar third-quarter earnings reports, said Lorraine Tan, director at Standard & Poor's equity research in Singapore. "Because the market was distracted by the election, it didn't really react. But people are now taking a step back and seeing that earnings weren't that great," she said. "With the potential risk to GDP growth next year, I think people are saying, 'I'll take a little money off the table, because the S&P had a pretty good run.' " The Standard &Poor's 500 index is up 10.9 percent for the year.