By Markets Media

The Downgrades

Traders and active investors became nervous on Friday as news broke that Standard & Poor’s was planning on downgrading the debt ratings of several countries in the European Union.

As a result, stocks sold off rather quickly and volatility picked up a bit with the CBOE Volatility Index (VIX) jumping more than 2% to 20.9. The S&P 500 fell 6 points to 1289, breaking the 1291 level of support. The Dow Jones Industrial Average closed at 12,422, down 48 points.

After the close of trading Friday, S&P ended up downgrading France and Austria one notch to AA+. Portugal, Italy, Spain and Cyprus fell two notches each. Ireland, Belgium and Germany’s ratings remained untouched.

This week, traders will keep a close eye on earnings, which could be a major arbiter of what’s to come. Major companies reporting earnings include Citigroup and Microsoft.

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