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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soundoff (206 Responses)
  1. The Not President

    Obama keeps insulting our intelligence, always using fancy words to try to deviate from the main problem :Him. Blacks never understood how economy works and they never will. He thinks that by talking he can fix things. Black people only see present and don't see future, they spend what they have and don't care what happens next. This is because if they don't have anything tomorrow they steal it.

    August 8, 2011 at 3:12 pm | Report abuse |
  2. Cesar The Chorizo Champ Of Chihuahua*

    Invest in any type of sausage company! We're all in the grinder now!

    August 8, 2011 at 3:16 pm | Report abuse |
  3. banasy

    @The Not President:

    Pardon, but your racism is showing.
    You might want to fix that before anyone notices.

    August 8, 2011 at 3:17 pm | Report abuse |
  4. Phantom II

    @ The Not President:
    Is that all blacks?

    August 8, 2011 at 3:36 pm | Report abuse |
  5. Black Voluntary Slave

    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 3:45 pm | Report abuse |
  6. Black Voluntary Slave

    Hurry, if you sign today you get a bowl of soup and a beef stick. No whipping, only a few kicks by our well trained seals team 6.

    August 8, 2011 at 3:48 pm | Report abuse |
  7. Black Voluntary Slave

    Serve our country and we will serve you a nice meal. Do you like rice? We know you do, so come on and sign today, tents are being set up at dump sites for your convenience. While you sleep your children can get some nice toys and left overs from the garbage next to your tent.

    August 8, 2011 at 3:53 pm | Report abuse |
  8. Black Voluntary Slave

    New!!! Available only this month: "choose a snack". Yes you heard right, if you sign today you can choose your own snack. We have peanut butter or a bowl of beans. Make your pick and go to sleep. Available only in Florida and Atlanta.

    August 8, 2011 at 4:06 pm | Report abuse |
  9. doc

    I'm delighted to see Wall Street get exactly what they deserve. Wall Street put its money on the Republicans Tea Party and you though you could control them. Well,this terrorist group has its own adjenda They are out to destroy country, so the country will come back to them. They really believe they must destroy the country in order to save it. Now look at you and all the money are losing. Enjoy the ride down to bottom, I will.

    August 8, 2011 at 4:13 pm | Report abuse |
    • Don WV

      Wall Street got what they deserve? Are you a moron or what? Just about every American got hurt today! I just got my entire retirement 401k wiped out! Maybe you think nobody needs to retire? And yes it was the Tea Parties Fault. They didn't not hold out for more cuts!

      August 8, 2011 at 7:01 pm | Report abuse |
  10. jl kidder

    Regans fault always has been always will be. Look at Cali and how long they have been in a mess

    August 8, 2011 at 4:14 pm | Report abuse |
  11. ty

    CONGRESS !!!!!!! WHERE IS YOUR APOLOGY.. YOU BLEW IT... ONCE AGAIN!!!
    USA NEEDS TO STAND UP FOR OUR RIGHTS. ANY ELECTIONS IN NOVEMBER... LET'S GET A CONGRESS THAT WORKS FOR US NOT THEMSELVES !!!!!!

    August 8, 2011 at 4:16 pm | Report abuse |
  12. Black Voluntary Slave

    Our contract is only for 25 years, if you decide to stay longer we will include one extra meal. Yes you can eat twice in one day after you renew our contract for another 10 years. Be smart and take advantage of our great founding fathers generosity. Note: you don't get a snack in your new contract.

    August 8, 2011 at 4:17 pm | Report abuse |
  13. Phantom II

    Who is Regan?
    I want somebody to blame.

    August 8, 2011 at 4:18 pm | Report abuse |
  14. WKBR AM

    Obama is almost as bad a Georgie W. Both seen like incompetents that do not care.

    August 8, 2011 at 4:20 pm | Report abuse |
  15. dale g

    We reap what we sow! The party is over!

    August 8, 2011 at 4:25 pm | Report abuse |
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