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. Kirk

    Dosen't everyone know that this is caused by the government spending along with what happened in the housing market. The government gave free loans to minorites that could not afford housing. This was tied into the world market and the market has not been the same since. If minorities would stop taking advantage of the government our economy would be in better shape. GET A JOB.Section 8 has ruined many sectors of good places to live by moving lower income into great neighborhoods for free bringing down good school districts.This is what is meant by the saying "spread the wealth" along with the free voucher system which is free money handouts to minorites. Go within the minority chuches and you will learn how to work the system. Check your city and see how many minority movement churches there are. They have most of them for their tax free business and not for religion purposes. This brings a town down with no tax revenue along with bringing our economy down. Start working towards regulating this and it would be a great start towards bringing the economy back.No one deserves free handouts that are bringing our economy down. Come on do not be blind to what's is going on in your area. This kind of minority movement is ruining america. They are usind the president for this and our government.

    August 8, 2011 at 6:30 pm | Report abuse |
  2. Phantom II

    @ tom:
    I'd say that if we cut Social Security, we must also cut the salaries and benefits of Congress.

    August 8, 2011 at 6:32 pm | Report abuse |
  3. A man

    We get what we deserve. I don't understand why we are crying like newly born baby on AA+ issue.

    August 8, 2011 at 6:34 pm | Report abuse |
  4. Phantom II

    And–
    Cut the president's salary, limit his use of Air Force One, and get him a Daimler for personal use.

    August 8, 2011 at 6:34 pm | Report abuse |
  5. tom

    This did not happen overnight. It will take time to fix. However our Congressmen and Senators are not helping matters. They are not listening to the people. They could have fixed this 6 or 8 months ago. Why wait till the last minute. This is not a Republican, Democrat, or Tea party issue. This is an American problem that has been let go on for too long. By the people and For the people .... And no one is listening TO THE PEOPLE ...

    August 8, 2011 at 6:37 pm | Report abuse |
    • Lyndsie Graham

      Right, Tom. Two years ago, Barack Obama could have gotten us out of Afghanistan but didn't. Had he done the right thing and gotten out of all these obscene wars overseas, this economy wouldn't have gotten where it is today, but try to tell the idiots on Capitol Hill that! They just don't listen like you say!!!

      August 8, 2011 at 7:28 pm | Report abuse |
  6. Bpe

    Agreed! How bout are president lead by example? Ha, we will never see the day

    August 8, 2011 at 6:41 pm | Report abuse |
  7. Alexander Trebek

    The answer is GREED, GREED, GREED. Alex- What is the reason the US of A imports sheetsky from China, Malaysia and Mexico resulting in an even deeper abyss! That is correct, Duhdlee!

    August 8, 2011 at 6:45 pm | Report abuse |
  8. The Bob

    The GOP stated that the government was the problem in 1981, they said they would "Starve the Beast" in 1984, they have worked diligently at this for 30 years and in 2010 stated that their purpose was to insure that Obama was a one term president. The number of times the debt ceiling has been raised is almost 2 to 1 and 2/3 of the debt created during Republican administrations. And we let them claim to be the party of fiscal responsibility? Sure why not.

    August 8, 2011 at 6:45 pm | Report abuse |
  9. Jeremy

    Lets riot, like they do on all the countries where people actually care about their futures

    August 8, 2011 at 6:47 pm | Report abuse |
  10. Phantom II

    During the London Blitz (WW II), the light bulbs at Buckingham Palace were very small, for two reasons–guess them.
    President Obama's car is very presidential.
    BTW, Truman's car wasn't all that big, either.

    August 8, 2011 at 6:47 pm | Report abuse |
  11. vkmo

    It will take many years and return to the old way of tackling debt ceiling in Congress to regain AAA rating.

    Congress' Boehner, Tea Party and GOP did this wishing for their own political gain and in total disregard of the nation's interests. Friday and Today's market reaction has wiped out many trillion $s off from American's retirement savings with this huge crash, also home prices are down, unemployme­nt and foreclosur­es are high. Mid America is particularly hard hit. They should be taken before George Washington statue in National Museum and told publicly that they have caused harm to the nation.

    August 8, 2011 at 6:50 pm | Report abuse |
  12. Phantom II

    I've been in the bedroom where the King and Queen of England slept at FDR's house (sic) in Hyde Park. NY.
    That also was not too hotsy-totsy.

    August 8, 2011 at 6:51 pm | Report abuse |
  13. The Bob

    I think the secret service has more to do with the presidents automobile than the president does.

    August 8, 2011 at 6:53 pm | Report abuse |
  14. Mmmmm

    Wall street is a ponzi front with bookies.

    August 8, 2011 at 6:54 pm | Report abuse |
  15. jeffrey

    If Mr. Perry spent as much time running Texas as he does run around or his own gain/ambitioms perhaps Texas would start to right itsel out of such a mess:

    August 8, 2011 at 6:55 pm | Report abuse |
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