U.S. stock markets sank at the open on Monday, and went down from there as investors looked to put their money in other investments, including gold, which set another record high.
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Wall Street opened with a thud, as stocks sank right from the get-go Monday morning.
It was the first U.S. stocks reaction to ratings agency Standard & Poor’s decision late Friday to downgrade the top tier AAA credit rating of the United States.
Markets in Asia and in Europe had already been hit hard with Japan’s Nikkei stock average sliding more than 2% by the close Monday, and top European shares on track for similar losses.
Workers in New York’s financial district had strong reactions:
Financial industry worker Robert Giordano says, “It’s scary. I mean it’s very concerning.”
Lawyer Jim McBride says, “I think it’s a disaster for the United States in the long term. I think it’s going to cost hundreds of billions of dollars”
And accountant Dave Shiretta says, “From a consumer you are concerned about interest rates. From an investor you are concerned about I am ready for retirement in three to four years so I’m concerned about what my 401(k) is going to look like.”
And for Americans fearful about their personal investments like 401(k) retirement plans, the mess in Washington and the outlook for the economy is downright scary.
As Alec Young, equities analyst at Standard & Poor’s, explains:
“A lot of people are concerned that too much regulation and political uncertainty was already bogging down our economy and I think there is concern that this action could also hurt an already weak economy. So it’s a combination of all the factors but from a headline perspective I don’t think there is any question that the global selling today is driven by the rating action after the close on Friday.”
By mid-morning, gold had vaulted above $1,700 an ounce, setting new records as investors flocked to what is considered a safe haven.
Bottom line: U.S. stock markets sank at the open on Monday, and went down from there as investors looked to put their money in other investments, including gold which set another record high.