S&P Nervous About US Controlling Debt
Why did stocks tumble yesterday? News that Standard & Poors sees a 1 in 3 chance that it will have to adjust the U.S. credit rating downward.
U.S. stocks plummeted Monday after Standard & Poor's warned that the United States could lose its triple-A credit rating if Congress and the president don't do something serious about cutting the federal debt and deficit.
The Dow Jones industrial average, which was down almost 250 points during the day, closed at 12,201.59, off 140.24 points or 1.14 percent. The United States is one of 19 governments that enjoy S&P's highest, triple-A sovereign credit rating. It has had that rating, and a stable outlook, since 1941, when Standard Statistics merged with Poor's Publishing to form S&P. The two predecessor agencies also gave the United States their highest ratings.
It's amazing that the president's popularity remains so stable.