The U.S. stocks tumbled on Monday as
S&P 500 and Nasdaq Index both dropped more than 6 percent and Dow lost more
than 600 points after a historic downgrade of U.S. credit rating by Standard
& Poor's.
Traders work on the
floor of the New York
Stock Exchange August 8, 2011.
(Xinhua/Reuters)
Late on Friday, the rating agency Standard
& Poor's downgraded U.S. credit rating from AAA to AA+, a move reflected
the agency's worried about the world's largest economy's debt problems.
Investors rushed to pull out their bet on the
equity markets on Monday, the first day they could react to the downgrade move.
The CBOE Volatility Index, which is regarded as the best gauge of markets'fear,
jumped nearly 50 percent to 47.51, the figure's first leap above 40 since May
2010.
The Dow Jones industrial average lost 634.76
points, or 5.55 percent, to 10809.85. The Standard & Poor's 500 was down
79.92 points, or 6.66 percent, to 1,119.46, its largest drop in nearly three
years. The Nasdaq Composite Index dropped 174.72 points, or 6.90 percent, to
2,357.69.
All sectors were in the negative territory
with capital goods, energy and financial sectors were among the most decliners.
The yield of 10-year Treasury note continued
to decline to below 2.4 percent, as investors still believed the treasury bonds
are safe bet especially in turmoil.
Besides U.S. debt concerns, investors also
worried that Spain
or Italy
could become the next European country to be unable to pay its debt.
Although the European Central Bank said that
it will buy Italian and Spanish bonds to help the countries to avoid a possible
default, investors worried given the much larger economic scale, comparing with
Greece
and Portugal,
it would be much harder for ECB to rescue the eurozone's third and fourth
economy.
In other markets, gold was pushed higher by
risk-aversion investment. Gold futures rallied 4.2 percent to close at a record
high of 1718 dollars an ounce.
Oil, which is regarded as a risky investment,
fell 6.41 percent to close at 81.31 dollars a barrel.
VietNamNet/Xinhuanet