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. paul scudder

    THAT'S IT JACK! I'M DUMPING MY INDEX FUNDS AND LIMITING MY PORTFOLIO TO GREEK AND ITALIAN GVT BONDS!

    August 8, 2011 at 4:27 pm | Report abuse |
  2. joe

    I need to find a cave

    August 8, 2011 at 4:27 pm | Report abuse |
    • Allan

      If you do, it will be full of tea partiers.

      August 8, 2011 at 4:34 pm | Report abuse |
    • schmo

      I dont care whos in the cave, im in.

      August 8, 2011 at 4:46 pm | Report abuse |
  3. Ghost of Harriet Tubman

    We don't play that game anymore.
    Don't even try it.

    August 8, 2011 at 4:40 pm | Report abuse |
  4. Allan

    W was given a budget surplus by Clinton, not exactly your "tax and spend liberal". He blew it all by giving a $trillion to his buddies and by spending a couple more $trillion on unnecessary wars. His clever financial pals went berserk in a poorly regulated and unsupervised financial market, ruining a chunk of the middle class in the process. Now, when the whole thing come tumbling down, you want to blame Obama? The republicans now want to starve the government of cash to pay even for the basic services the American people want and deserve essentially guaranteeing a recession of their own making.

    Where is the shame on the part of the Republicans?

    August 8, 2011 at 4:50 pm | Report abuse |
    • Lyndsie Graham

      To tell the truth Allan, the Republicans know no shame nor do they feel any remorse any more than the Tea Partiers and "blue-dog" Democrats. They're all warmongering idiots with no regard for neither human feelings nor human life itself!!!

      August 8, 2011 at 5:14 pm | Report abuse |
    • Centaur

      I agree. The Republicans are destroying the middle class, which is the backbone of the USA. The middle class has to unify and vote Republicans out of office before they do more harm.

      August 8, 2011 at 5:28 pm | Report abuse |
  5. Phantom II

    @ Allan:
    I agree.
    So does Ms. Tubman.

    August 8, 2011 at 4:56 pm | Report abuse |
  6. alex george

    We may have been downgraded however we are the most powerful stable country in the world. Our country needs no credit we set the standards for defense and national security. Our govts job is to protect its citizens and rule thru democracy. An agency opinion is not important. I would never live any place but the USA.

    August 8, 2011 at 5:01 pm | Report abuse |
  7. GB

    Obama has been disappointing but Bush put us in a hole that will take us 20 years to dig out from. He is clearly the worse President ever.

    August 8, 2011 at 5:05 pm | Report abuse |
  8. Phantom II

    The agency's rating is only an indication of something that IS.
    All of this is not about math and plans (and politics).
    Don't enough of us feel the loss of community that is involved here?

    August 8, 2011 at 5:07 pm | Report abuse |
  9. Tom the trucker

    As she Lincoln said it is time for us a nation to face the math

    August 8, 2011 at 5:08 pm | Report abuse |
  10. A. Jones

    People need to use something other than the Dow for reference. Day traders hopefully have helped people who are not complete idiots make money. You should have to be a little smarter than an idiot to play the markets..WHATEVER HAPPENED TO BUYING QUALITY COMPANY'S WITH ACTUAL PRODUCTS.

    August 8, 2011 at 5:11 pm | Report abuse |
  11. alex george

    Why blame Obama or bush its the voters who should be blamed for getting them in office. Let's start the blame with us the voters.

    August 8, 2011 at 5:11 pm | Report abuse |
  12. Phantom II

    Math is a product of Spirit.
    It's time for our nation to face the Spirit.

    August 8, 2011 at 5:13 pm | Report abuse |
  13. Tom the trucker

    As Abraham Lincoln said it is time for us as a nation to face the math,we are the united states of America its time our congress and leadership started acting like it or they will be replaced.

    August 8, 2011 at 5:15 pm | Report abuse |
  14. Phantom II

    I would not invest in a company that could not form a plural.
    And you wonder where the Dow went.

    August 8, 2011 at 5:16 pm | Report abuse |
  15. bryan micon

    Question for you middle class folk...why do you invest in a game where you are not in the inner circle? You do realize the elite make money no matter what through their manipulation of the markets. Is it to feel like your part of the club? Because you're certainly not and they are going for the kill shot. Goodbye middle class. So many people in america were conned. You all should be outraged. Its inevitable, kiss your worthless dollars goodbye. You should have known the elite own the politicians and media. Instead you were distracted with your routine and lived in la-la land. Congrats to the globalists. Well played.

    August 8, 2011 at 5:17 pm | Report abuse |
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