Stock market today: Wall Street heads for its worst day in months as its rally loses more momentum
Wall Street is heading for its worst drop in months as a torrid rally that critics called overdone lost momentum
NEW YORK — Wall Street is heading for its worst drop in months on Wednesday as a torrid rally that critics called overdone lost momentum.
The S&P 500 was down 1.3% in afternoon trading and heading for its sharpest drop since April. It would also mark a second straight loss after hitting a 16-month high.
The Dow Jones Industrial Average was down 334 points, or 0.9%, at 35,296, as of 2:45 p.m. Eastern time, and the Nasdaq composite was 2.1% lower.
Prices were mixed in the bond market after Fitch Ratings cut the credit rating of the U.S. government. The repeated standoffs in Congress about whether to allow a default on the U.S. debt were just some of the reasons for Fitch's cut. The downgrade strikes at the core of the global financial system because U.S. Treasurys are considered some of the safest possible investments.
Fitch’s move follows a similar one by Standard & Poor’s in 2011, one that coincided with a European debt crisis to help cause stocks and bonds around the world to swing violently. So far, this most recent downgrade has caused less drama across markets.
While the downgrade highlights how much debt the U.S. government has and the big challenges it faces in how to pay for Social Security, Medicare and other expenses, none of that is news for investors.
“Fitch’s downgrade is much ado about nothing,” said Brian Jacobsen, chief economist at Annex Wealth Management.
“Yes, it’s good to call out the fiscal situation, but when a country only issues debt in its own currency, the credit rating is irrelevant. Every investment fund I’ve looked at specifies that US Treasury securities are allowed investments,
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