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
Post by:
Filed under: Business • Economy • Finance
soundoff (206 Responses)
  1. The Bob

    I'm not all that old but I remember when it was a big deal that the dow was UP to 2500. Calm down.

    August 8, 2011 at 6:56 pm | Report abuse |
  2. Mmmmm

    The money disappears to private purses and pockets, banks, and reserves...stop investing.

    August 8, 2011 at 6:56 pm | Report abuse |
  3. Phantom II

    Yeah, and I have a secretary too. She works out my schedule.

    August 8, 2011 at 6:57 pm | Report abuse |
  4. Phantom II

    Mmmmm is correct: the money disappears into private pockets wherever you go.

    August 8, 2011 at 7:12 pm | Report abuse |
  5. jj

    I love all the comments about bush obomba has been office for two and half years and people still blame bush! wow What about accovotability in the here and now wait that would make ur savior look bad as he should tee hee

    August 8, 2011 at 7:14 pm | Report abuse |
  6. Don WV

    The President of the United States ignored the recommendations of his own bipartisan budget committee.

    From the Washington Post: Posted at 11:44 AM ET, 02/20/2011

    "Rep. Chris Van Hollen (D-Md.) was also asked to comment on the budget debate and the potential for a government shutdown. "I hope they won't push it to that," he said, defending the president's budget proposal against the claim that his budget proposal all but ignored the recommendations of the president-appointed Fiscal Responsibility Commission.

    "His plan disavows the commission's recommendations," said Ryan, countering Van Hollen's claim that the president's budget proposal was in agreement with the recommendations. "He actually has failed to lead on these issues," Ryan said. "This president has punted. ... He has chose not to lead. ... We are going to lead."

    Feinstein said: on 07/24/11
    "Fifteen to 20 million people in my state depend on the programs that Republicans want to take a meat axe - not a scalpel but a meat axe - to," she said. "We need to know how it's done, because it's possible to cut back some of these programs, but it's going to take some real care and concern to see that it's done so it hurts people the least. Now Republicans don't care about that."

    In my opinion looking at the evidence I would say this is definitely Obama's fault !
    Maybe they should have skipped the meat axe, and went straight to a chainsaw!

    August 8, 2011 at 7:33 pm | Report abuse |
  7. sdbaggz

    THE OTHER SLIPPER HAS FALLEN OFF. HERE COMES INFLATION. BOTTOM LINE TIME TO MAKE CUTS AND GET THE DEBT TO INCOME RATIO INLINE.

    August 8, 2011 at 7:41 pm | Report abuse |
  8. Lyndsie Graham

    What we now need to do is to get out from under all of these useless wars overseas, make a deep cut in the military budget consisting of some $600T and finally, make the wealthy pay their fair share of the taxes. The trouble is that as long as the right-wing fanatics remain in control of things, none of these things mentioned above will happen!

    August 8, 2011 at 7:47 pm | Report abuse |
    • WOW

      You sir are a nincompoop!

      August 8, 2011 at 8:16 pm | Report abuse |
    • Arigatomj

      You nailed the problem right there! 2 wars and tax cuts in 2001 and 2003 put us in the deficit we're in and dug a hole so deep that we're having a hell of a time getting ourselves out of. 😦

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

    What s&p just did to the american/world economy is a crime. The consequences were obvious. Way to screw us all over. S&p is run by an indian national, making it have the appearance of him trying to destroy the us economy while helping india and china to emerge as more powerful. These people are playing games with the lives of everyone else for their own power.

    August 8, 2011 at 7:55 pm | Report abuse |
  10. this is funny

    Let it crash! down to nothing! america is on its way out! dump washington and split into regional sectors!

    August 8, 2011 at 8:02 pm | Report abuse |
  11. Matthew Jandecka

    Not surprising! And it will only eventually get worse. Those who make make policy in the US have been feeding on the fat of this great nation for years. Now they're getting down to the bone. Soon there will be nothing left. What made this nation great was "industrialization". Once upon a time when the nation wasn't overly burdened with regulations and taxation. Ahh... those were the days!

    August 8, 2011 at 8:13 pm | Report abuse |
  12. Bill

    Change you can believe in -thanks Obama.

    August 8, 2011 at 8:31 pm | Report abuse |
    • Bill

      Now all I have is change- in my IRA...

      August 8, 2011 at 8:34 pm | Report abuse |
  13. Joew

    After Soviet Union .... Is it time for US? Hope no but I see this country is going this way....unfortunately

    August 8, 2011 at 8:37 pm | Report abuse |
  14. smokey

    Aaaaaaah it doesnt matter. Things will get better or stay the same or get worse. I just dont care anymore. Whatever happens the ultra rich will get alot richer.

    August 8, 2011 at 9:05 pm | Report abuse |
  15. JIM

    Watch the movie INSIDE JOB. Bank deregulation and NAFTA has destroyed our country. No jobs for anyone. If you think things are bad just wait and see 10 years from now.

    August 8, 2011 at 9:09 pm | Report abuse |
1 2 3 4 5 6 7 8 9 10 11