S&P’s warning that it could downgrade most of the stocks in the euro caused investors to flee stocks.
In Asia, the Nikkei 225 was down 1.3% to 8,575. The Hang Seng dropped 1.2% to 18,942. Asia could be affected by downgrades that would raise borrowing costs in Europe which would further strain already weak economies.
At the open in Europe, the FTSE as down .45%. The UK was not mentioned as part of the downgrade package. The DAX dropped 1.28% to 6,026. Banks in Germany and particularly France should be under pressure today because of their sovereign holdings.
The S&P warning in one in a series of deep concerns expressed by governments and economists that the lack of a financial support system for the euro zone’s weakest economies could cause a break up of the alliance, a default of some of the most troubled nations, or both
US futures are likely to open down ahead of 9.30 AM EST
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