Wall Street fell on Wednesday after rating agency Fitch's move to downgrade the U.S. government's credit rating hit appetite for risky assets around the world.Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years as well as a growing general government debt burden, making it the second major rating agency after Standard & Poor's move in 2011 to strip the country of its triple-A rating.The yield on U.S. 10-year Treasury notes rose to 4.07%, after briefly slipping earlier in the day.Safe havens gold and the Japanese yen rose, while the dollar index climbed 0.5%.Several major brokerages said Fitch's downgrade was unlikely to result in a sustained drag on U.S. financial markets, noting that the economy was stronger than in 2011. "Certainly markets haven't reacted anything like they did back in 2011, but as investors come in and look at what's going on, it makes them a little uncomfortable and the natural reaction is to simply hit sell," said Randy Frederick, managing director of trading and derivatives for Charles Schwab. "Markets are also a bit stretched to the upside and are also probably due for some pullback. "At 9:39 a.m. ET, the Dow Jones Industrial Average was down 124.43 points, or 0.35%, at 35,506.25, the S&P 500 was down 35.45 points, or 0.77%, at 4,541.28, and the Nasdaq Composite was down 185.63 points, or 1.30%, at 14,098.28.Megacap stocks including Tesla, Nvidia, Meta Platforms and Apple fell between 1.3% and 1.8%.Meanwhile, the ADP National Employment report showed private payrolls increased more than expected in July, pointing to continued labor market resilience that could shield the economy from a recession.U.S.

Source: Economic Times August 02, 2023 23:46 UTC