By CHRISTINE HAUSER
Published: August 7, 2011
Within minutes of the opening bell in the United States, the broader market as measured by the Standard & Poor’s 500-stock index was down 28.39 points, or 2.37 percent. The Dow Jones industrial average was down 232.65 points, or 2 percent, and the Nasdaq was down 65.43 points, or 2.58 percent.
Guy LeBas, chief fixed-income strategist for Janney Montgomery Scott, said the limited early declines suggested that the market had already factored in the downgrade.
“It is by no means a disaster,” Mr. LeBas said. And higher prices for bonds were “a testament to the fact that global investors view U.S. bonds as the safe-haven asset choice.”
The declines, if sustained through the trading session, are set to shave even more value from equity portfolios after last week’s declines, which made up the worst drop in a five-day trading period since November 2008. By last Friday, the S.&P. 500 had dropped 7.1 percent over the week and the Dow was down 5.7 percent.
While the decision late Friday by the ratings agency Standard & Poor’s to downgrade the United States’s debt rating one level to AA+ from AAA was likely to continue to reverberate, investors are also concerned about the weak United States economy and Europe’s debt problems.
The Treasury’s benchmark 10-year note yield was down to 2.47 percent from 2.56 percent on Friday.
The interest rates on Spanish and Italian bonds plummeted Monday after the European Central Bank expanded its purchases of government debt to support those countries for the first time.
Stocks, however, fell in Europe and Asia, the dollar continued to weaken against most major currencies, and gold topped $1,700 for the first time.
In Britain, the FTSE 100 was down 1.2 percent. The DAX in Frankfurt was down 2 percent, and the French CAC 40 was off 1.6 percent.
Guy LeBas, chief fixed-income strategist for Janney Montgomery Scott, said the limited early declines suggested that the market had already factored in the downgrade.
“It is by no means a disaster,” Mr. LeBas said. And higher prices for bonds were “a testament to the fact that global investors view U.S. bonds as the safe-haven asset choice.”
The declines, if sustained through the trading session, are set to shave even more value from equity portfolios after last week’s declines, which made up the worst drop in a five-day trading period since November 2008. By last Friday, the S.&P. 500 had dropped 7.1 percent over the week and the Dow was down 5.7 percent.
While the decision late Friday by the ratings agency Standard & Poor’s to downgrade the United States’s debt rating one level to AA+ from AAA was likely to continue to reverberate, investors are also concerned about the weak United States economy and Europe’s debt problems.
The Treasury’s benchmark 10-year note yield was down to 2.47 percent from 2.56 percent on Friday.
The interest rates on Spanish and Italian bonds plummeted Monday after the European Central Bank expanded its purchases of government debt to support those countries for the first time.
Stocks, however, fell in Europe and Asia, the dollar continued to weaken against most major currencies, and gold topped $1,700 for the first time.
In Britain, the FTSE 100 was down 1.2 percent. The DAX in Frankfurt was down 2 percent, and the French CAC 40 was off 1.6 percent.
I think this is one of sad days for the United States in share market. It can be also hard for a traders for the investment.
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