NEW YORK (WWJ/AP) – The U.S. stock market joined a sell-off around the world Monday in the first trading since Standard & Poor’s downgraded American debt.
The Dow Jones industrial average plummeted more than 600 points in afternoon trading.READ MORE: Some Michigan Residents Now Have To Dial 10-Digit Numbers
Treasury prices rose — despite S&P’s assessment that they were a riskier investment than the debt of some other countries like Canada and France. Investors still view Treasurys as one of the world’s few safe havens from turmoil in other financial markets like stocks or commodities.
The yield on the 10-year Treasury note fell to 2.35 percent from 2.57 percent late Friday. A bond’s yield drops when its price rises. The 10-year note’s yield fell as low as 2.06 percent in 2008.
Speaking live on WWJ Newsradio 950, financial adviser Leon LaBrecque, founder and managing partner of Troy-based LJPR, said the nation has to get rid of what he calls an “ominous” amount of debt.
“We have debt pushing almost the exact amount of our GDP and that’s never good,” said LaBrecque.
But, at least in his eyes, LaBrecque said the U.S. still has a top-tier credit rating.
“I mean, the Isle of Man has a higher credit rating, and New Zeland has a higher credit rating, and, egads, even the French have a higher credit rating,” he said. “But, where are you going to go put trillions of dollars? There’s still only one place to do it. And we do have an economy that’s still thriving. Even if it slows down, it’s still thriving.
Hear more from WWJ’s interview with LaBrecque: