Breaking: S&P Downgrade 50/50
By Michael Kitchen
LOS ANGELES (MarketWatch) -- Standard & Poor's Ratings Services said late Thursday it has placed U.S. sovereign credit ratings on watch for possible downgrade, saying the action "signals our view that, owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days." S&P had already lowered its outlook on the U.S. AAA long-term rating to negative in April, but since then "the political debate about the U.S.' fiscal stance and the related issue of the U.S. government debt ceiling has, in our view, only become more entangled," it said. The U.S. Treasury responded to the move Thursday saying it "restates what the Obama Administration has said for some time: that Congress must act expeditiously to avoid defaulting on the country's obligations and to enact a credible deficit reduction plan that commands bipartisan support."
