Tuesday, April 19, 2011

US markets fall on revised outlook

Source: Press TV

The US stock market has sharply dropped after a ratings agency downgraded its outlook for the American economy.

All three indices in the New York Stock Exchange dropped with the Dow Jones industrial average opening more than 1.62 percent down at 12, 141 points.

The Standard & Poor's 500 index opened nearly 18-points down -- with a drop of more than 1.3 percent.

Meanwhile, the Standard & Poor's ratings agency's outlook for the US has been revised down, well into negative territory.

The agency cites a growing risk that US policymakers may not reach agreement on solving the country's massive budget deficit.

S&P's new outlook for the US economy comes amid popular uprisings in the Middle East and North Africa, which have also triggered a sharp rise in oil and gold prices.

Following the announcement, gold closed at a new high of USD 1,493 an ounce compared with USD 1,476.75 previously.

The dollar initially fell against the euro on the S&P announcement, but then recovered to stand 1 percent higher than Friday's level at EUR 1.12.

The US Treasury responded that S&P had underestimated its ability to tackle the national debt.

The US budget shortage hit a record USD 1.65 trillion this year, or 10.9 percent of GDP, according to figures in Obama's 2012 budget.

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