THE DAILY TELEGRAPH: Ratings agency cuts long-term outlook from stable to negative for first time since Pearl Harbor attack 70 years ago
Shares fell heavily on Wall Street on Monday after a leading ratings agency fanned fears of Europe's debt crisis spreading across the Atlantic by issuing a strong warning about America's failure to tackle its budget deficit.
In a move seen by Wall Street as a "shot across the bows" of bickering politicians in Washington, Standard and Poor's (S&P) said it was cutting the outlook on the US's long-term rating from stable to negative for the first time since the attack on Pearl Harbor 70 years ago.
The announcement surprised the financial markets, where attention in recent months has been focused on the problems of the weaker nations of the eurozone. Renewed speculation that Greece will be forced to default on its debts led to a sharp sell-off in the euro, but S&P stressed that the US was not immune from the sovereign debt crisis.
In New York, the Dow Jones industrial average ended the day down 140 points, or 1.1%, with the dollar weaker on the foreign exchanges and yields rising on US treasury bills. The FTSE 100 in London was down 126 points at 5870 – a drop of more than 2% – as ongoing concerns about the eurozone's debt crisis were compounded by the setback for the world's biggest economy. » | Larry Elliott, Economics editor | Tuesday, April 19, 2011
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