The Dow Jones Industrial Average plummeted 140 points, or 1.14 percent to 12,202 while the S&P 500 slid 14.5 points, or 1.1 percent to 1,305. The Nasdaq composite slipped 29.3 points, or 1.06 percent to 2,735.
Standard and Poor's said it would not yet adjust the current AAA rating for U.S. sovereign debt but a lack of confidence in US leaders to agree on a management plan for the debt led the group to adjusts its long-term outlook from stable to negative. The negative outlook means that the S&P believes the US has at least a 33% chance of having their credit rating downgraded.
The market sunk in the aftermath as investors worried about the potentially devastating effects of the actual downgrade. An S&P downgrade would have a deleterious effect on business both globally and domestically.
Gold was higher as investors looked for a safe haven meanwhile shares of Chevron (NYSE: GM) and Gap(NSYE: GPS) sunk.
Shares of Amarin (NASDAQ: AMRN) went against the market curve soaring over 90 percent after its triglyceride-reducing drug, AMR101fulfilled primary and secondary goals in a phase 3 trial.
Heartware (NASDAQ:HTWR) declined by over 13%. Demand Media was down 10% after news broke that Google will be further limiting its SEO.
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