World Stocks Fall Before S&P Cuts

On Friday, the single currency (euro) fell to a near 17-month low and world stocks fell in anticipation that Standard & Poor’s would downgrade the ratings of several euro zone countries, including France. The credit ratings agency, S&P took the action after U.S. markets closed.

World Stocks Fall Before S&P Cuts

S&P downgraded its debt ratings on nine euro zone countries, including France, Italy, Spain, Portugal, and Austria.

“I think market participants may now be factoring in that longer-term risk factor in the equation – that Europe will take a while to sort itself out, that the economic recession in the region is now there for some time and possibly for longer than consensus estimates,” said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which has about $13 billion in assets.

The euro tumbled to a low of $1.2623 against the dollar, its weakest level since late August 2010.

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