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. john

    I blame president obama. Its all his fault. Thats why u dont have a black for president

    August 8, 2011 at 5:18 pm | Report abuse |
    • Allan

      You may need some medical attention.

      August 8, 2011 at 5:27 pm | Report abuse |
  2. chris

    What are you people afraid to say about this president? He has failed, one policy decision after another and they are putting the blame on wall street, whom the democrats bailed out. This is the failure of big governmnt liberalism

    August 8, 2011 at 5:19 pm | Report abuse |
    • Lyndsie Graham

      No it's not, chris. It's the failure of the last 30 years of Conservative Fanaticism, beginning with the Reagan Administration!!!

      August 8, 2011 at 5:24 pm | Report abuse |
    • Fonz01

      Nope it's Obama's fault. He's had 3 years so far and everything is worse than before. This is another example.

      August 8, 2011 at 5:28 pm | Report abuse |
  3. Ernie Beatty

    We must congratulate the Wall Street investors for doing their patriotic duty today by losing on money on Wall Street in order to contribute to our ever Glorious Victory in Afghanistan. The jobless and Congress already did their part to this end. Now on to victory as any Tea Partier like me would say, but then again we Tea Partiers are rather ignorant!!!

    August 8, 2011 at 5:21 pm | Report abuse |
  4. calvin

    Mr. Obama. It looks like you still do not get it. We are not foolish like your. It is serikus matter of our economic, debts and earning. There is nothing relate to US political system . It is spending that leads our country to bancrupcy.

    August 8, 2011 at 5:22 pm | Report abuse |
  5. john

    Serious dont vote a black person for a job thats meant for more suited for a white such as bill clinton or george bush.

    August 8, 2011 at 5:23 pm | Report abuse |
  6. Riight

    Ladies and Gentelmen welcome to the: O(bama) State.

    August 8, 2011 at 5:23 pm | Report abuse |
  7. Riight

    Socialism doesn't work..especially with a supposed capitalist system. Time to impeach!!

    August 8, 2011 at 5:25 pm | Report abuse |
  8. ozman3000

    God bless America, no seriously, God we need a miracle!!!

    August 8, 2011 at 5:27 pm | Report abuse |
    • Fonz01

      In 2008 bunch of retarded Americans thought that miracle was Obama. Well now they can ponder their stupidity since they don't have jobs or money anymore. Obama is a goon & a fraud.

      August 8, 2011 at 5:31 pm | Report abuse |
  9. Riight

    Guess Obananna needs to realize his socialist plans are not working.

    August 8, 2011 at 5:28 pm | Report abuse |
  10. malcolm

    to the uninformed..its both parties and this just dont happen in the past two years..this being giong on for a very long time..just now its out of control..all pols lie and say what u want hear..

    August 8, 2011 at 5:28 pm | Report abuse |
  11. George Patton

    All this is the direct result of the 30-year-Conservative Binge that this country has been on since the advent of the Reagan Administration with it's almost insane right-wing fanaticism! We need to get off the this binge bigtime and declare the party over. In other words, it's time to sober up!

    August 8, 2011 at 5:31 pm | Report abuse |
  12. Riight

    Obananna needs to be impeached- he's not a leader AT ALL!

    August 8, 2011 at 5:32 pm | Report abuse |
  13. Fonz01

    America needs to wake up and pay attention to what's going on in America and the world and stop paying so much attention to Jersey Shore & American Idol & gay marriage. None of that crap will matter to a hill of beans in a few years if the US doesnt get it's act together now!

    August 8, 2011 at 5:34 pm | Report abuse |
  14. Phantom II

    @ John:
    Do you honestly think that this happened because Obama is black?
    What do you think would have happened if Colin Powell had been elected president? The same thing?

    August 8, 2011 at 5:37 pm | Report abuse |
  15. Think Its time

    Personally I just say strike new money and make everybody equal again....the debt ceiling was raised and the poor people of the country are going to pay for it while the rich just keep getting richer as always....and the deal they put through didnt help since we lost our credit rating anyway. Its time to let the fat cats of this country help by paying their taxes and such. Like they said on the news, the rich and powerful do not have to pay one red cent in taxes because of their tax abatement's. Guess us working class has to pay their taxes for them.

    August 8, 2011 at 5:37 pm | Report abuse |
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