Moody’s reclassification of Greek bonds to junk bond status through a Ba1 rating seemed to dampen investor’s spirits on Monday as the Dow Jones Industrial Average sunk in the last few minutes before closing. The Dow dropped 20.18 points to close at 10,190.89 after spending most of the day with gains. Moody’s reclassification of Greece’s debt was significant and was not a gradual or slight reduction. This obviously worked on the nerves of investors who are already concerned about a European debt crisis.
European and Asian markets were up on Monday possibly due in part to indications of economic recovery thanks to positive data about industrial production in Europe. It is possible that tomorrow’s market action will not be as optimistic as overseas markets have time to react to the Moody’s change.
One major loser today was BP Plc (NYSE: BP) whose stock fell over 9%. Upcoming BP congressional hearings and political pressure to forego paying a quarterly dividend are likely to blame for this drop.
The Nasdaq barely avoided losses and was up less than one point to close at 2,243.96. The S&P 500 was not as lucky. It lost almost 2 points and closed at 1,089.63.
