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Downgrade Issues European, U.S. Stock Market Weakens

U.S. stock markets finally fell on the weekend after the four previous periods are always stronger. The trigger is a step in the Standard & Poor’s credit ratings downgraded over the nine-nation eurozone.

The rating agencies downgrade reported on the euro zone countries, including France and Austria, but also mentioned ranking of Germany and the Netherlands did not change.

“The situation will become increasingly unstable and will lead to greater funding needs because they are all based on the ranking of AAA, and now you will have a AA + to France and Austria. While debt rating Italians will probably go down two levels,” said Director of DME Securities Alan Valdes as quoted by Reuters on Saturday (14/01/2012).

In recent days, the S & P 500 has reached a five-month high on U.S. data behind a solid economic. The close relationship between the stocks in the U.S. and the eurozone become unidirectional in recent weeks. That is, investors are not focused will the euro zone woes.

In late trading Friday U.S. time, the Dow Jones Industrial Average fell 48.96 points, or 0.39 percent, to 12422.06. Standard & Poor’s index fell 6.41 points, or 0.49 percent to 1289.09 and the Nasdaq Composite Index fell 14.03 points, or 0.51 percent to 2710.67.

For this week, the Dow gained 0.5 percent, while the S & P 500 rose 0.9 percent, and the Nasdaq rose 1.4 percent.

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