The Dow fell more than 600 points Monday, and had one of its largest plunges immediately following President Obama’s speech in the afternoon regarding the downgrade on U.S. debt. In his first public statement following the S&P downgrade, President Obama attempted to encourage Americans that markets still regard the U.S. government debt as being the highest possible grade.
President Obama said, "Markets will rise and fall. But this is the United States of America. No matter what some agency may say, we've always been and always will be a triple-A country."
Obama said he hoped the downgrade would give U.S. politicians "a renewed sense of urgency" in the need to address the U.S. deficit and debt.
Despite Obama’s message, stocks have extended their losses with the Dow Jones falling 5.55 percent, as investors remain nervous regarding the U.S. credit rating downgrade.
Before Obama’s speech, the Dow had only been 2.5 percent.
The Dow Jones industrial average fell more than 600 points, or more than 5.5 percent. The S&P 500 stock index tumbled more than 4.7 percent. Investors seeking safety drove gold prices up and treasury yields down.
Stocks have fallen following Monday’s announcement of further S&P downgrades, including Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt.
Banks are heading the decline in the S&P 500, according to Stock Market Watch, with Bank of America leading the way losing 18 percent, and JP Morgan Chase with 7 percent.
Market fears were also reflected in the price of gold and oil today, with gold jumping to a new record high and the price of oil slipping further.