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S&P eurozone cut talk hits euro, stocks

Jan 13 2012 16:43
Berlin - Credit rating agency Standard & Poor’s is set to downgrade several eurozone countries, not including Germany, on Friday, a senior euro zone government source said.
The source did not say which countries’ debt ratings would be downgraded.

The euro fell to a global session low against the dollar on Friday after talk of the downgrade. The euro hit a low of $1.2687 and last traded at $1.2704, down 0.9 percent on the day, according to Reuters data.

European shares turned negative with the pan-European FTSEurofirst 300 index of top shares was down 0.5% at 1,013.98 points after earlier rising as high as 1,026.81.

“There is a rumour that S&P is about to downgrade several countries, that is what is causing the weakness in stocks,” a London-based trader said.

U.S. stocks fell at the open. The Dow Jones industrial average was down 86.05 points, or 0.69 percent, at 12,384.97. The Standard & Poor’s 500 Index took off 10.42 points, or 0.80 percent, at 1,285.08. The Nasdaq Composite Index dropped 20.99 points, or 0.77 percent, at 2,703.71.

Standard & Poor’s declined to comment on Friday on reports it was set to downgrade several euro zone countries imminently.
Reports that downgrades were on the way as early as Friday hit stocks, the euro and boosted demand for safe-haven US government debt.


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