USA: Reports of possible S&P downgrades to European countries drives down U.S. stocks

Record ID: 187115

  • Title: USA: Reports of possible S&P downgrades to European countries drives down U.S. stocks
  • Date: 14th January 2012
  • Summary: NEW YORK CITY, NEW YORK, UNITED STATES (JANUARY 13, 2012) (REUTERS) STANDARD & POOR'S BUILDING IN LOWER MANHATTAN STANDARD & POOR'S SIGN ON BUILDING VARIOUS OF STANDARD & POOR'S BUILDING
  • Embargoed: 29th January 2012 12:00
  • Keywords:
  • Location: Usa, Usa
  • Country: USA
  • Topics: Economy
  • Reuters ID: LVA1S9U52BOL8ZD8MVGY26C1SA5B
  • Story Text: Bank shares led a 1 percent drop in U.S. stocks on Friday (January 13) as speculation swept the market that Standard & Poor's was set to downgrade the ratings on several euro zone countries.
    A senior euro zone source said S&P would downgrade the credit ratings of several euro zone countries later on Friday, but not those of Germany and the Netherlands. S&P declined to comment on the report.
    Another source confirmed "several" countries would be hit.
    French TV, citing a government source, said France's credit rating would be downgraded and another source said Slovakia, the euro zone's second poorest country currently rated A+ by S&P, would suffer the same fate.
    In December, S&P placed the ratings of 15 euro zone countries on credit watch negative - including those of top-rated Germany and France, the region's two biggest economies - and said "systemic stresses" were building up as credit conditions tighten in the 17-nation bloc.
    Since then, the European Central Bank has flooded the banking system with cheap three-year money to avert a credit crunch.
    The Dow Jones industrial average fell 127.98 points, or 1.03 percent, to 12,343.04. The S&P 500 Index dropped 14.18 points, or 1.09 percent, to 1,281.32. The Nasdaq Composite .IXIC lost 26.67 points, or 0.98 percent, to 2,698.03.
    JPMorgan Chase & Co was down 3.3 percent to $35.60 (USD) after the bank said fourth-quarter profit fell as the European debt crisis weighed on trading and corporate deal-making.
    An index of bank stocks fell 1.7 percent Friday after rising almost 11 percent so far this year.
    Indexes held on to slight gains for the week and were near five-month highs on the back of stronger-than-expected economic data. The latest evidence of sustainable growth was a report that consumer sentiment hit an eight-month high as Americans became more optimistic about job prospects.
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