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dow2664 At open on Monday the market experienced sharp sell offs as Standard & Poor’s lowered its outlook for America’s long term credit rating from “stable” to “negative”. The outlook was based on the growing concern over the ballooning deficit and the continuing political debate over reduction plans. Reports indicate there is a one-in-three chance the long term rating could be lowered at some point in the next two years. The VIX, the most widely cited measure of volatilty in the market, surged 16% after the announcement. Nervous investors sold off long term treasuries and crude oil, while gold was boosted as investors fled to the ‘safe haven’ commodity. The U.S. was not the only country in the spotlight today as Greece potentially pursues a debt restructuring and Ireland received another downgrade from Moody’s Investors Service that lowered Irish banks to junk status. In an effort to limit lending and curb inflation, China’s central bank has once again increased the amount of capital it requires banks to hold in reserve. Finland’s True Finns party gains ground in the country’s coalition government with a recent election. The party opposes European Union bailouts and stands as another barrier in the process of providing future bailout loans. Investor sentiment dropped with the latest world news and they are bracing themselves for the next round of quarterly financial results. At close the major market indexes continue to trend in the red. The Dow dropped 140.24 points or 1.14% to 12,201.59. The Nasdaq lost 29.27 points or 1.06% to 2,735.38. The S&P 500 decreased by 14.54 points or 1.10% to 1305.14. The U.S. Treasuries 10 year yield was down 0.04 to 3.37%. Oil dropped to $107.41 a barrel. The indices ended red for April 18th, 2011. Author: Pamela Frost
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