Dow drops 634 points after S&P downgrade
August 8th, 2011
04:16 PM ET

Dow drops 634 points after S&P downgrade

[Updated at 4:16 p.m.] The Dow Jones Industrial Average has suffered its worst one-day loss since December 2008, plummeting 634.76 points - to 10,809.85 - after S&P downgraded its rating for U.S. credit.

Monday's preliminary figure, after trading ending at 4 p.m. ET, represents a one-day loss of 5.5%. The Dow is below 11,000 for the first time since November.

The S&P 500 fell 6.6% and Nasdaq Composite was down around 6.9%.

[Updated at 2:27 p.m.] Dow extends loss to 600 points as stock sell-off accelerates.

[Updated at 2:03 p.m.] Dow drops 450 points, falling below 11,000 for first time since last November, as sell-off extends.

[Updated at 1:57 p.m.] President Barack Obama said Monday that the downgrade of the U.S. credit rating by Standard & Poor's occurred because "they doubted our political system's ability to act."

[Updated at 10:33 a.m.] Stocks extend losses after Mortgage finance agencies Freddie Mac and Fannie Mae were downgraded by S&P, following downgrade of the United States. Dow falls more than 300 points.

[Updated at 10:09 a.m.] U.S. stocks plunged Monday as Wall Street had its first opportunity to react to Standard & Poor's downgrade of U.S. debt.

The Dow Jones industrial average was down 203 points, or 1.8%; the S&P 500 lost 25 points, or 2%; and the Nasdaq Composite dropped 58 points, or 2.8%.

Monday's selloff was broad, with 28 out of the Dow 30 and 495 members of the S&P 500 trading in the red. The blue chips were dragged lower by a 8% drop in Bank of America shares and a 4% decline in shares of Alcoa.

CNNMoney.com: Track the markets

[Posted at 9:12 a.m.] U.S. stocks were set to tumble at the open Monday, tracking deep declines in global markets, as investors get their first opportunity to react to Standard & Poor's downgrade of U.S. debt.

S&P 500 and Nasdaq futures were all down more than 2% ahead of the opening bell. Dow Jones industrial average futures were less than 2% lower. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Late Friday, S&P downgraded United States' credit rating by one notch to AA , removing it from the Triple A-club for the first time in history.

Economists and investment strategists largely agree that there could be an initial shock, but the downgrade itself should not impact markets too much.

Still, the rating cut is unprecedented, so nobody can be certain.

Fortune: Wall Street to investors: Don't panic

FULL CNNMONEY.COM STORY
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Filed under: Business • Economy • Finance
soundoff (206 Responses)
  1. War Syndrome

    Now that all of our military is gay we should feel safer, our commanders are very happy that they can get free blo/jobs. The amount of money the military spends is infinite. All of our economy problems have only one name Osama Bin Laden. He was right when he said he was bringing down the USA.

    August 8, 2011 at 11:26 am | Report abuse |
  2. Osama Bin Laden/Obama Biden Leader Of The Decepticons

    Ahahaha.. I never died.. You can't kill a ghost. I blew up the world trade physically, now I will do it, by kicking the economy while it's down. I've got you all mindF(_)©ked thinking it's one party or the other.. Mwahaha. My Decepticon have infiltrated both parties and we have been siphoning off money while you all struggle.. Stupid humans. Too easily swayed by a feel good story, a good speech, and racial guilt.. Mwahahaha..

    August 8, 2011 at 11:37 am | Report abuse |
    • Uraluni

      I knew it! Now this explains everything.

      August 8, 2011 at 11:45 am | Report abuse |
  3. Osama Bin Laden/Obama Biden Leader Of The Decepticons

    @Uraluni: Why do you think I conjured up the story about dumping my body off a navy ship? I knew the American public was too stupid to see that I stole the idea from Transformers the movie.. Bwahahaha! I'd check in the Laurentian Abyss for my body if I were you..

    August 8, 2011 at 11:50 am | Report abuse |
  4. Black Slave Voluntary Day

    Attention: All blacks must report to the nearest voting facility to become eligible as a voluntary slave, due to our current economic situation we are offering voluntary slave status to all blacks. If you do not report as voluntary slave, you will be jailed and deported to your original country, Africa. Be smart and work for a decent meal. America needs you.

    August 8, 2011 at 11:57 am | Report abuse |
  5. hand solo

    Im a luni too ! WAHOOOOOOO ! : )

    August 8, 2011 at 11:58 am | Report abuse |
    • Confucius

      @hand: Better to be solo with hand than together with Aids.. Yes?

      August 8, 2011 at 12:15 pm | Report abuse |
  6. Black Slave Voluntary Day

    The president is also included in this beautiful and remarkable opportunity.

    August 8, 2011 at 12:00 pm | Report abuse |
    • Whiteeey Ford Sings The Gospel

      @BlackSlaveGuy: Can we send the decedents of the whites that brought slaves over here back to Africa with them? Personally what I see going on is the sins of the father affecting the sons.. pretty soon we're all going to be slaves and I'm white. Those earning just enough for food and shelter are already slaves, but they just don't get whipped and they have an option to go to school to better themselves. That computer or phone you're typing on probably has components made by slaves thanks to our congress not passing laws forbidding american companies from exploiting child/slave labor.

      August 8, 2011 at 12:13 pm | Report abuse |
  7. Well......

    What else was expected?

    August 8, 2011 at 12:15 pm | Report abuse |
  8. bobcat2u

    Everyone of the republican/teaparty supporters are so quick to point out the deficit President Obama has accrued. But the thing they won't admit is the fact it was a necessary evil due to the trashing of our economy by the Bush administration. The money that was spent on the bailouts was definitely having a positive effect on our economy. Then came the republicans and teaparty into the majority for the house. The rest pretty much speaks for itself. I don't think even the people who voted to put them in were expecting what they got. Please everyone, correct your mistake at next years elections.

    August 8, 2011 at 12:37 pm | Report abuse |
    • RUFFNUTT

      Don't forget bobcat2u, that a great deal of our tax money went to finance these useless and unnecessary wars halfway around the world thanks to Obama and the right-wing thugs in Congress and now that's coming back to bite us!

      August 8, 2011 at 2:45 pm | Report abuse |
    • bobcat2u

      @RUFFNUTT You are absolutley correct as I was trying to point out to Gee who posted directly below us. Too many people just seem to be so blind to what got us into our current predicament. Hopefully the mistakes will be corrected at the next election.

      August 8, 2011 at 2:58 pm | Report abuse |
  9. Gee

    @bobcat: You're a tool, a fool and you probably drool. Clinton signed NAFTA into law. I thought the liberals loved the American worker? The problem is both parties and you're right about purging the bad ones. They all have been far too cozy for too long. Bailing out banks did nothing to address outsourcing and that is the number one reason for consumer confidence being so low. No income equals no money to buy stuff. Add the high gas prices to it and it's obvious. Stop being a sheep.

    August 8, 2011 at 12:42 pm | Report abuse |
    • bobcat2u

      You're a fink and you probably stink. While it is true that Clinton signed NAFTA into law, under his administration, the economy was booming. When he left office our government actually realized a budget surplus. That was despite his raising of the taxes. Now when Bush took offices he implemented the tax cuts that the well to do have been enjoying for the past ten years. And how do do they show their appreciation ? They continue to outsource many more thousands of jobs. Plus, Bush decided to start two unfunded wars. That is the reason why our economy is tanking. So take your stupid little rhymes and try to pay attention to what's going on around you.

      August 8, 2011 at 2:52 pm | Report abuse |
  10. Justen beiber

    I like little boys

    August 8, 2011 at 1:30 pm | Report abuse |
  11. Jesse Cook

    We all have to make sacrifices for our most glorious victory in Afghanistan! Just like it's the duty of the unemployed to do without work, the investors now have their duty to lose money on Wall Street! All for our most Glorous Victory in Afghanistan and if the national suffers, so be it. SIEG HEIL!!!

    August 8, 2011 at 2:11 pm | Report abuse |
    • Gary Johndro

      Yes Jesse, we have our patriotic duties and I see that the Wall Street investors are now doing theirs by losing bigtime on the stock market! Don't worry folks, I'm doing mine too by going without work as I have been doing for some time. All for our truly Glorious Victory in Afghanistan as I join you in saying, SIEG HEIL to the Tea Partiers, the Republicans and the "blue-dog" Democrats in Washington!!!!!!

      August 8, 2011 at 2:40 pm | Report abuse |
  12. saywhat

    We downgraded ourselves the day we invaded Iraq. What has been unfolding since is a natural consequences of our follies.
    What did we expect that pouring trillions of borrowed dollars into military conflicts which make nio sense & are going nowhere and Special Op operations around the world and billions every month on our 700 bases around the world would make us prosper & turn US of A into a welfare state??
    That foreign lobbies, Big business which lead our politicians by their noses every which way but the American way, would work in the interest of Americans??
    That the propaganda machines both in the media & politics churning out hate & fear to keep our focus diverted away from real issues & on religion and the enemy in far off lands are patriotic ??

    Now we are jolted out of our stupor & start bawling. And those politicos in Washington have nothing to offer even now but play the bickering blame game.
    so if we are sitting up now, where do we the people start to make our voices heard?

    August 8, 2011 at 2:28 pm | Report abuse |
    • RUFFNUTT

      Good posting, saywhat. Thank you.

      August 8, 2011 at 2:47 pm | Report abuse |
    • Allan

      Well said; the best post so far in a sea of mindless sloganizing.

      August 8, 2011 at 4:41 pm | Report abuse |
  13. Bert van driessche

    Someone should demonstrate that credit ratings should be regulated. They don't take into account the risk of global meltdown if they magnify credit as a failure of capitalism. Someone should ban the communistic terrorism.

    August 8, 2011 at 2:58 pm | Report abuse |
  14. banasy

    *Sigh*

    August 8, 2011 at 3:03 pm | Report abuse |
  15. nichole

    Obamos speach was the lamest ever. He doent seem to even care if the dow falls to zero. Gosh he is turning out to be a dud.

    August 8, 2011 at 3:05 pm | Report abuse |
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