Geo Business

Dow plummets 4.5 percent, sinks below 11,000

NEW YORK: The Dow Jones Industrial Average plummeted 4.4 percent on Monday, dropping below the 11,000 level for the first time since November, as markets continued a global sell-off. The broader S&P 500 lost 5.5 percent, while the tech-heavy Nasdaq Composite plunged 5.7 percent in the sell-off, triggered by Standard & Poor's downgrade of the United States's credit rating. US stocks hit fresh lows for the day as President Barack Obama gave a televised speech in which he defended Washington's credit-worthiness and declared that the United States "always will be a triple-A country". Standard & Poor's lowered the US long-term sovereign debt rating from AAA to AA+ after markets closed Friday, citing Washington's inability to rein in its mounting deficits. On Monday morning, Standard & Poor's extended its downgrade to mortgage giants Fannie Mae and Freddie Mac, whose bonds are guaranteed by the US government and widely held around the world. Traders worried that the downgrade would hit the bond markets, but instead Treasury prices climbed. The yield on the 10-year Treasury fell to 2.36 percent from 2.56 percent late Friday, while 30-year bonds dropped to 3.70 percent from 3.82 percent. Bond prices and yields move in opposite directions. (AFP)