DOW Plunges 630 Points in Response to S&P Downgrade

The downgrade by S&P of the U.S. AAA rating stewed in the minds of investors all weekend, and their reaction was to drive the DOW down 630 points.

DOW(n) market

(CNNMoney) — Wall Street had its worst day since the 2008 financial crisis, as fearful investors reacted to the United States losing its coveted AAA credit rating.

All three major U.S. stock indexes sank between 5% and 7%, pushing the Dow below 11,000 for the first time since last November.

U.S. stocks have fallen 15% during the past two weeks.

Though observers said S&P’s downgrade shouldn’t matter all that much, the market wasn’t buying it.

“Investors are having one reaction to the downgrade: sell first and ask questions later,” said Paul Zemsky, head of asset allocation with ING Investment Management.

Even if investors dismissed the downgrade, they’d still have to contend with the European debt crisis and rising fears of a new U.S. recession.

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