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Stocks drop, Treasury yields dip after Fitch downgrades U.S. rating

Aug 2 (Reuters) – Global shares dropped and Treasury yields dipped on Wednesday after ratings agency Fitch unexpectedly downgraded the United States’ top-tier sovereign credit rating.

Fitch cut the United States by one notch to AA+ from AAA, citing fiscal deterioration, a decision announced after the Wall Street close on Tuesday.

The news hit global stock markets, taking Europe’s STOXX 600 index (.STOXX) to a two-week low. The index paired its losses but as of 1112 GMT it was still down 0.8% .

U.S. stocks were also set to open lower with Nasdaq futures having fallen more than 1% in earlier trade. Asia-Pacific stocks dropped earlier, partly amid signs of some weakness in China’s economy. (.MIAP00000PUS)

U.S. 10-year Treasury yields were down 3 basis points, while credit default swaps, which…

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