MidnightWatcher – Prophecy in Motion

“Standard & Poor’s cut the credit ratings of nine European countries on Friday in a widely-anticipated move. Rumors that the downgrades were imminent had been circulating in various reports throughout the day.

S&P lowered its long-term rating on Cyprus, Italy, Portugal and Spain by two notches, and cut its rating on Austria, France, Malta, Slovakia and Slovenia by one notch.

‘Today’s rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policy makers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,’ S&P said in a press release announcing the downgrade.

The credit-rating agency affirmed the current long-term ratings for Belgium, Estonia, Finland, Germany, Ireland, Luxembourg and the Netherlands.

U.S. stocks slumped earlier amid buzz about the possible downgrades, though finished well off their lows. European shares closed lower.

In December, S&P placed the ratings of 15 euro zone countries on credit watch negative — including those of top-rated Germany and France, the region’s two biggest economies — and said ‘systemic stresses’ were building up as credit conditions tighten in the 17-nation bloc.” Read more.