Markets to open at 9:30, 30 minutes. I will be living blogging the event, watching the Dow.
News stories at Drudge: (some are left over from the weekend…)
CHINA: Dollar to Be ‘Discarded’ by World…
Lectures How ‘Good Old Days’ of Borrowing Have Ended…
Tel Aviv stocks fall 7% after USA debt downgrade…
Nikkei drops 2%…
Wall St braces…
US Futures tumble…
European leaders scramble to calm investors…
S&P: 1 in 3 chance USA will fall ANOTHER notch!
Moody’s threatens…
Recession without shock absorbers…
Gold soars above $1,700…
PRE-MARKETS… DEVELOPING…
U.S. Stock futures followed global shares sharply lower on Monday morning, extending the worst weekly rout since 2008, on the heels of Standard & Poor’s downgrade of American debt.
Today’s Markets
As of 7:45 a.m. ET, Dow Jones Industrial Average futures slid 250 points to 11,151, S&P 500 futures tumbled 29.8 points to 1,168 and Nasdaq 100 futures dipped 54.3 points to 2,134.
For the first time in history, S&P cut America’s top-notch credit rating one notch to AA-plus from AAA after the close of trading on Friday. The ratings company also said it may slice the ratings another notch over the next two years.
Global markets sold off on the news on Sunday and into Monday morning. Indeed, the Japanese Nikkei 225 tumbled 2.2%, while European markets fell by more than 1% in mid-day trading there.
S&P’s move came as a result of concerns over the country’s substantial public debt burden and deep divides within Congress that almost sparked an unprecedented default on U.S. sovereign debt. Moody’s Investor Service, another ratings company, affirmed American’s AAA rating, while Fitch is still performing a review.
WSJ Reports: US Stock Futures Down After S&P Downgrade; Gold Higher, Oil Slides:
Wall Street was set for a sharply lower opening Monday after the unprecedented downgrade of U.S. debt by Standard & Poor’s, while gold futures soared nearly $60 as investors sought a safe haven.
Futures on the Dow Jones Industrial Average fell 221 points to 11181. Futures on the Standard & Poor’s 500 index dropped 25 points to 1172.75 and those on the Nasdaq 100 sank 46.25 points to 2140.75.
After the close of Wall Street trading on Friday, Standard & Poor’s downgraded the U.S. government’s AAA debt rating to AA+, and assigned it a negative outlook. The agency said the U.S. political system had become less stable and the deficit-reduction deal reached by lawmakers last week was not extensive enough.
“The downgrade was expected,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “As the first-ever [U.S. debt downgrade] announcement, it was taken as a shock, but I think it was pretty much priced into the marketplace.”
“Whether or not investors continue to choose to lower the risk, I think that’s yet to be seen and I think the real basis for this huge decline has a lot to do with hedge-fund selling, which feeds on itself,” said Cardillo.
The Dow Jones Industrial Average fell 5.8% last week, its worst weekly performance since March 6, 2009, while the S&P 500 index fell 7.2% on the week, its worst since late 2008. The Nasdaq finished the week down 8%, its worst since late 2008 as well.
Markets Open: (via Seeking Alpha)
Monday, August 8, 9:31 AM At the open: Dow -1.57% to 11265. S&P -1.48% to 1182. Nasdaq -3.34% to 2448.
Treasurys: 30-year +0.73%. 10-yr +0.61%. 5-yr +0.41%.
Commodities: Crude -3.88% to $83.51. Gold +2.96% to $1700.70.
Currencies: Euro -0.89% vs. dollar. Yen +0.78%. Pound -0.34%.
AP Reports:
NEW YORK (AP) — U.S. stock futures tumbled Monday amid a rout in global stocks after Standard & Poor’s downgraded the U.S. credit rating for the first time.
S&P cut the long-term debt rating for the U.S. by one notch to AA+ from AAA late Friday. The move wasn’t unexpected, but it comes when investors are already feeling nervous about a weak U.S. economy, European debt problems and Japan’s recovery from its March earthquake.
Ahead of the opening bell, Dow Jones industrial futures fell 200 points, or 1.8 percent, to 11,202. S&P 500 futures fell 24, or 2.percent, to 1,173. Nasdaq 100 futures fell 44, or 2 percent, to 2,143.
In Europe, the German DAX index fell 2.3 percent. In Asia, Japan’s Nikkei 225 index fell 2.2 percent.
Prices for U.S. government debt, though, rose. That’s because Treasurys are still seen as one of the world’s few safe investments. The yield on the 10-year Treasury note fell to 2.5 percent from 2.57 percent late Friday. It fell as low as 2.46 percent earlier Monday. A bond’s yield drops when its price rises.
Via Seeking Alpha:
Monday, August 8, 9:39 AM China’s Dagong rating agency takes a victory lap for its Aug. 2 downgrade of U.S. debt, and adds a new warning that S&P’s cut could upset already-volatile stock and bond markets – not just today. “This is a downward trend,” Dagong’s Guan Jianzhong says, and the U.S. could face a full-scale meltdown if its debt crisis can’t be solved.
Needless to say; we’re in a new Market era. We need new political leadership and quickly.
Markets at 10:00am: (via Seeking Alpha)
Monday, August 8, 10:00 AM On the hour: Dow -1.69%. 10-yr +0.79%. Euro -0.67% vs. dollar. Crude -2.88% to $84.38. Gold +2.66% to $1695.70.
End live Blog.
Update: Where’s the President, while this is all going on? Hiding in his Bunker. 🙄