BUMPED 8/5: USA Loses S&P AAA Credit Rating; Dow Plummets More Than 500 Points in One Day

In it's worst single day since the 2008 Subprime meltdown, the Dow Jones fell 512 points on Thursday, wiping out their gains for the year in one afternoon. The 4.31% loss would be the market's biggest single-day loss since October 2008. Declining stocks outnumbered stocks that finished ahead on the day by a 14 to 1 margin.

Meanwhile, the NASDAQ was down 2.68 on Thursday. Gold prices pulled back slightly from an all-time high to end at $1652 an ounce while oil dropped down from $92 a barrel to $83.

The losses weren't limited to the NYSE or NASAQ either. North of the border, the TSX Composite dropped 3.4% while in Asia the Nikkei was down 3.72%, Straits Time was down 3.61% and the Hang Seng index plunged 4.29% overnight.

Analysts believe that a concerns over the economy, high unemployment numbers, the recently passed debt ceiling deal and the ongoing Eurozone crisis played a part in Thursday's selloff.

The massive selloff comes a day before the July jobs report is set to be released, but investors and analysts have even less reason to optimistic as far as that's concerned.

Curiously, a number of experts that spoke out in favor of the debt ceiling cautioned that this was exactly the scenario the markets would face if the ceiling wasn't raised.

UPDATE 8/5:: The markets closed on a mixed note Friday afternoon, with the Dow-Jones up 60 (0.54%) and the NASDAQ down 24 points (0.94%). However, that was nothing compared to the bombshell that was dropped after the markets closed on Friday afternoon.

Credit rating agency Standard & Poor's on Friday lowered the nation's AAA rating for the first time since granting it in 1917. The move came less than a week after a gridlocked Congress finally agreed to spending cuts that would reduce the debt by more than $2 trillion -- a tumultuous process that contributed to convulsions in financial markets. The promised cuts were not enough to satisfy S&P.

The drop in the rating by one notch to AA-plus was telegraphed as a possibility back in April. The three main credit agencies, which also include Moody's Investor Service and Fitch, had warned during the budget fight that if Congress did not cut spending far enough, the country faced a downgrade. Moody's said it was keeping its AAA rating on the nation's debt, but that it might still lower it

Interestingly, this is the exact opposite of what Treasury Secretary Tim Geithner said would happen if a debt ceiling agreement was reached.

Not surprisingly, the Obama Adminstration has gone after the messenger by shooting it with both barrels.

WASHINGTON, Aug 5 (Reuters) - The Obama administration attacked the credibility of the analysis underlying Standard & Poor's decision to downgrade the United States' top credit rating on Friday, saying it had found a $2 trillion error.

S&P was forced to remove the number from its analysis after Treasury officials discovered that the rating agency's estimates of the government's discretionary spending was $2 trillion too high, sources familiar with the discussions said.

There was evident dismay, and some anger, within the Obama administration at S&P's decision to downgrade U.S. debt despite the errors officials said they had found in the calculations.

"A judgment flawed by a $2 trillion error speaks for itself," a Treasury spokesman said after S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

Also unsurprisingly, Senate Majority leader Harry Reid (D-NV) used the occasion of the S&P's Downgrade announcement to call for tax increases.

[Hat tip: Jammie Wearing Fool: Sea of Syrah]

FCC Approves Comcast-NBC Deal

Federal regulators have approved a deal this week in which cable giant Comcast [NASDAQ: CMCSA] acquired a 51% stake of NBC Universal from General Electric [NYSE: GE].

In a 4-1 vote on Tuesday, the FCC determined that the deal, which creates a company with a combined 16.7 million broadband subscribers and 23 million cable customers, is in the nation’s public interest, seeing it complies with certain conditions.
The conditions, among other things, are intended to ensure that the nation’s largest cable provider share NBC programming, such as MSNBC and USA Network, with cable, satellite and Internet rivals. They are meant to stop the conglomerate from trampling competition, which could ultimately lead to an increase in prices for customers, according to the Department of Justice.

Also according to the deal, Comcast will have to offer online video distributors the same package of broadcast and cable channels as it sells to traditional video programming distributors.

This deal effectively makes Comcast the parent company of MSNBC, which as any cursory glance at the ratings will tell you, was likely kept around by the benevolnce towards the networks leftist 'personalities' by GE CEO Jeffery Immelt. It will be interesting to see if this deal in any way changes the arrangement (and God-awful business model) between MSNBC and its parent company.