Rumors Circulating on S&P Downgrades cause World Markets to Drop

Fresh rumors are circulating this morning regarding sovereign downgrades. Standard and Poor’s is denying the story that they are circulating documents amongst European Countries informing them of the downgrades before making the news public.

The euro is plummeting in regards to the rumors, trading now at 1.2699 from 1.2814 at the close last night.

The Wall Street Journal  is reporting citing European Union sources that Standard & Poor’s could move as early as Friday to downgrade euro-zone countries.

EU markets are plummeting in response with the Stoxx 600 index down 0.5%

U.S. stocks opened sharply lower on Friday on reports of coming downgrades of euro-zone nations by rating agency Standard & Poor’s. “With the likelihood of an S&P credit downgrade of France, Spain, Italy, Belgium and Portugal, it’s important to understand that number one, they are just following what the markets have priced in and number two, Fitch and Moody’s in some circumstances have already moved ahead of S&P.

The Dow Jones Industrial Average  fell 98.01 points to 12,373.01. The S&P 500 lost 9.65 points to 1,285.85. The Nasdaq Composite Index declined 17.95 points to 2,706.75.  The Wall Street Journal quoted European Union sources as saying rating agency Standard & Poor’s could downgrade euro-zone states as soon as Friday. Europe stocks fell across the board.

One government official familiar with the matter said an S&P notice is being circulated among euro-zone governments and that an announcement “could be imminent.”

S&P declined to comment on the possibility of an imminent announcement on euro-zone credit ratings. S&P had placed 15 euro-zone countries on negative credit watch on Dec. 5.

The Dax dropped to 6135 down almost 1% on the news. In France the CAC has plummetted almost 1% since the news circulated.

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