The U.S. stock market joined in a sell-off around the world today in the first trading since Standard & Poor’s downgraded American debt and gave investors another reason to be anxious. The Dow Jones industrial average fell more than 250 points minutes after the opening bell on Wall Street. It recovered some of those losses, then fell again and was down 295 points in midmorning trading. Stock markets in Asia began the global rout. The main stock index fell almost 4% in South Korea and more than 2% in Japan. European markets opened later and fell, too, with Germany down 3% and France 2.5%.
It was the first chance for global investors to respond to S&P’s announcement late Friday that it was reducing its credit rating for long-term U.S. government debt by one notch, from AAA, the highest rating, to AA+. The move wasn’t a total surprise but came when investors were already feeling nervous about a weak U.S. economy, European debt problems and Japan’s recovery from its March earthquake. In other early trading on Wall Street, the S&P 500 index fell 36 points, or 3%, to 1,163. The Nasdaq composite index fell 84 points, or 3.3%, to 2,449. The Dow was at 11,146, down 2.6%. Fresh memories of the financial crisis three years ago are also driving investors away from risky investments and into what’s considered safer.
