US shares suffer sixth biggest fall in history as panic grows
In the first trading since the decision by the Standard & Poor's ratings agency to strip the US of its AAA credit rating, shares on Wall Street recorded one of their worst one-day falls ever.
Last night the Dow Jones Industrial Average closed down 635 points – 5.6 per cent – at 10,810 after a day of relentless selling. The index has fallen by more points on only five occasions.
In London, the FTSE-100 index ended lower for the seventh day in a row, and has now lost over 800 points, or 13.7 per cent. By contrast gold, a traditional safe haven in troubled times, hit yet another all-time high, at over $1,700 an ounce. London shares are at their lowest since July 2010, just after George Osborne's emergency Budget.
Investors have been especially spooked by remarks from David Beers, head of sovereign credit ratings at Standard & Poor's, who said: "We don't anticipate a scenario at the moment in which the US would quickly return to AAA."
More bad news came from the Organisation for Economic Co-operation and Development, the club comprising the advanced economies, which warned of a further slowdown in the global economy. It said that growth rates in the US, Japan and Russia have peaked, while Britain, the eurozone and others are in a "continued slowdown".
