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. saywhat

    What did you expect folks ?
    That our obsession with wars and military interventions under the guise of bringing democracy to countries where have no business to interfere would bring us prosperity ?
    That pouring trillions of dollars (borrowed) into wars, covert operations around the world and 700 military bases would make US of A a welfare state?
    That criminal follies like the invasion of Iraq & its after math would add to our prestige and make us stand taller? With legacy of torture & corruption that the architects of that disaster left in Iraq? Lying to & deceiving the American public.
    That foreign lobbies and Big business leading our politicians by their noses everywhichway but the American way were watching our interest?
    We commenced our down grading with the Iraq war & the consequences keep unfolding.

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

      Well said, saywhat. That's one of the most sensible posts here yet. Thank you.

      August 8, 2011 at 5:45 pm | Report abuse |
  2. Noel Freedman

    Gee, one would think everyone had stock in the stock market. Actually, i have no debts, plenty of cash in the bank, my home is paid for, we have a garden. Tell me, what did I do wrong. Oh, I voted for Obama. I would have voted for McCain simply to stick him with Iraq; but I could not stomach Sarah Palin.

    August 8, 2011 at 5:44 pm | Report abuse |
  3. Gary

    Black,white,green or yellow stupid is still stupid. We all need to stand up and stop talking about fixing our country and fix it. I know if things does not work now then maybe we need change and lots of it not just talk or blame

    August 8, 2011 at 5:44 pm | Report abuse |
  4. fbmarky

    Wow. Rich people are suffering today. How's that feel guys? At least something nice has come from all of this! Maybe, if you lose all your money, you can get welfare and foodstamps from the government. Oops! That's gone now, too. Oh, well. Just get another job. There's plenty of 'em out here.

    August 8, 2011 at 5:48 pm | Report abuse |
  5. Gary

    This mess our country is in is way bigger than any one man can fix. Thats all obama is, a man!

    August 8, 2011 at 5:49 pm | Report abuse |
  6. casteroperator

    All the rich teaparty don't won't to pay taxes ,now what ha ha ha .....

    August 8, 2011 at 5:49 pm | Report abuse |
  7. Roman

    And the fifth angel pour his bowl upon the throne of the beast. That being Wall Street. And the Kingdom, U.S, (one nation under God) became dark.
    The seventh trumpet. God destroys those who destroy the earth. Texas home to the oil companies.

    August 8, 2011 at 5:52 pm | Report abuse |
  8. Riight

    True stupid is stupid,however, Obama's plans didn't help anytthing- infact made things worse!

    August 8, 2011 at 5:53 pm | Report abuse |
  9. joe

    Biblical Christianity is the andwer

    August 8, 2011 at 5:55 pm | Report abuse |
  10. Neil Z

    Thank you tea party for costing me my 401K. You want to just kick us poor people out of the way. When are you going to hand out cyanide capsules to the sick and poor. At least the democrats seem to care

    August 8, 2011 at 6:04 pm | Report abuse |
    • rhonda

      Ha! Are you friggin kidding me? Did you get your daily sound byte about the tea party from Obama? They were THE only ones who actually presented an idea that would've prevented this from happening.

      August 8, 2011 at 6:12 pm | Report abuse |
  11. Troll Hunter

    What will stoning your child do to solve this? What will having a dumb wife that listens to a scam artist do to help the world? Rubbish.. All these rappers wearing crosses and gold have done nothing to bring us closer to christ.. Just closer to our judgement.. The way out is to boot out these churchly leaders and elect someone with morals and brains. Washington needs an enema.

    August 8, 2011 at 6:10 pm | Report abuse |
  12. Phantom II

    @ Joe:
    The answer, you mean?

    August 8, 2011 at 6:11 pm | Report abuse |
  13. saywhat

    " Its economy, jobs & cuts in services that is fuelling rioting in London".
    Sounds scary hunh!
    The whole of Europe could well face that scenario & then.......?
    I just hope & pray that sanity returns to Washington.

    August 8, 2011 at 6:21 pm | Report abuse |
  14. tom

    My thoughts are that before we cut the middle class or raise taxes or worry about cutting Social Security. The President, Vice President and ALL the Congressmen, and Senators should take a pay cut or NO pay at all for awhile until they fix this mess.

    August 8, 2011 at 6:25 pm | Report abuse |
    • Bpe

      I agree! But that wouldn't please our elected officials would it? It sure would be nice to have a president that leads by example.

      August 8, 2011 at 6:39 pm | Report abuse |
  15. Phantom II

    Judith Miller wrote an opinion on Fox News about Obama's speech today.
    Whether I absolutely agree with Ms. Miller or not, she is certainly one heck of a writer.

    August 8, 2011 at 6:28 pm | Report abuse |
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