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AP Business NewsBrief at 2:37 p.m. EDT(Associated Press Via Acquire Media NewsEdge) US markets fall sharply, Dow down more than 500NEW YORK (AP) _ The Dow fell below 11,000 and investors poured into Treasurys in the first trading day after Standard & Poor's downgraded American debt. The Dow Jones industrial average fell 547 points, or 4.8 percent, to 10,897 in afternoon trading. It was the first time the index fell below 11,000 since November. US debt downgrade could mean rate hikes for allNEW YORK (AP) _ Lawmakers weren't able to prevent the country from losing its coveted AAA debt rating. Although the downgrade late Friday by Standard & Poor's was historic, it wasn't entirely unexpected. The three main credit agencies, which also include Moody's Investors Service and Fitch Ratings, had warned during the fight over the debt ceiling that if Congress did not cut spending far enough, the country faced a downgrade. Investors resigned to more portfolio painInvestors are frustrated. After the downgrade of the U.S. government's debt rating, many are bracing for their portfolios to take a lasting hit, all while they're left with few options to limit their losses. Yet there's also a sense that the ratings cut by Standard & Poor's could spur Congress to take the painful long-term steps needed to confront the government's debt burden, and strengthen the economy. Getting to that point, however, will require patience. Central bank action eases Europe's crisis, for nowFRANKFURT, Germany (AP) _ The European Central Bank pulled Italy and Spain back from immediate financial disaster on Monday, driving down the countries' dangerously high interest rates by buying up billions of euros worth of their bonds on the open market. But the rescue mission does not address the roots of Europe's 21-month-old financial crisis _ such as how to stop countries from building up the towering debts that led Greece, Ireland and Portugal to take bailouts after bond markets wouldn't lend them more money at affordable rates. Traders on the NYSE floor react to S&P downgradeTo succeed as a trader on the floor of the New York Stock Exchange you have to have a steely disposition. Traders know the rhythms of the market. And they don't usually flinch, not even at the top of a rollercoaster. But as the market opened Monday, dropping nearly 250 points almost immediately, some traders couldn't help but betray their nerves. AIG sues Bank of America for $10B over mortgagesNEW YORK (AP) _ American International Group Inc. said Monday it sued Bank of America Corp. for more than $10 billion, saying the bank cheated it by selling residential mortgage-backed securities that were overvalued. Bank of America denied the allegations, saying AIG "recklessly" chased investments with high returns, and was big and sophisticated enough to know the risks. Verizon workers hit picket lines from Mass. to Va.NEW YORK (AP) _ Thousands of striking workers in Verizon Communication Inc.'s landline division joined picket lines and rallies Monday at company offices from Massachusetts to Virginia, a union official said. The contract for 45,000 employees expired at midnight Saturday after the company and the workers were unable to come to terms on issues including health care costs and pensions. The dispute does not affect the wireless division at Verizon, the nation's largest wireless carrier. S&P downgrades Fannie and Freddie, US-backed debtWASHINGTON (AP) _ Standard & Poor's Ratings Services on Monday downgraded the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt. The agency also lowered the ratings for: farm lenders; long-term U.S. government-backed debt issued by 32 banks and credit unions; and three major clearinghouses, which are used to execute trades of stocks, bonds and options. Airlines begin rolling back fare hikesDALLAS (AP) _ U.S. airlines have started rolling back last month's fare increases, so passengers are likely to pay the same prices even though federal ticket taxes are being collected again. Southwest Airlines Co., its AirTran Airways subsidiary and Delta Air Lines Inc. said they cut fares back to where they were before July 23, when the taxes expired. Gold price tops $1,700 as investors seek refugeNEW YORK (AP) _ The price of gold streaked past $1,700 an ounce for the first time Monday. Investors, beset by worries about the U.S. debt downgrade, Europe's financial crisis and slowing global growth, sought safety in the metal as stocks tumbled around the world. Gold's allure stems in part from fears that the world's major economies are dangerously indebted. Its value, unlike that of a currency, doesn't hinge on whether countries can make their bond payments. (c) 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. |