Standard & Poor's | featured news

Credit rating agency Standard & Poor's on Friday downgraded the United States' credit rating first time in the history of the ratings.

Investors fled Wall Street in the worst stock-market selloff since the middle of the financial crisis in early 2009 in what has turned into a full-fledged correction. The Dow and the S&P tumbled more than 4 percent on Thursday and the Nasdaq lost 5 percent on fear the United States is staring at another recession and that Europe's sovereign debt crisis is swallowing two of its largest economies.

Standard & Poor's cuts Greece's credit rating, saying eurozone plans to restructure the country's debts would constitute a default.

Standard and Poor's does not think the United States will default on its debt, the rating agency's president Deven Sharma said on Wednesday.

Standard & Poor's reiterated on Thursday it sees a real risk that future U.S. government deficits may meaningfully miss discussed targets and that there is a 50-50 chance the U.S. AAA credit rating could be cut within three months, perhaps as soon as August.

The rating agency said a plan proposed by the French government and banks to roll over some debt could fall within the definition of default.

The United States would immediately have its top-notch credit rating slashed to "selective default" if it misses a debt payment on August 4, Standard & Poor's managing director John Chambers told Reuters.

Standard & Poor's cut its ratings on Greece three notches on its expectations of the likelihood of one or more defaults over the next 12 months.

Regulators took new steps Wednesday to overhaul the firms whose rosy credit ratings inspired overconfidence in investments tied to toxic mortgages. The Securities and Exchange Commission proposed rules meant to improve the system by which such firms as Moody’s and Standard & Poor’s assign ratings.

Ratings firms won another victory against legal claims that they should be held responsible for billions of dollars in losses suffered by investors during the financial crisis. A three-judge panel of the U.S. Court of Appeals for the Second Circuit ruled that Moody's Corp., Standard & Poor's, and Fitch Ratings can't be held liable for their ratings of mortgage-backed securities.