Black Monday: Dow plunges -600 points in volatile trading

August 8, 2011 – NEW YORK – The blue chips shed as much as 600 points, and nearly every S&P 500 component was deep in the red, as economic and global sovereign debt fears pummeled Wall Street. Meanwhile, gold spiked nearly 4%, and Treasury bonds rallied as traders sought out safe havens. shares like Dow-component Bank of America (BAC: 6.66, -1.51, -18.50%) and Citigroup (C: 27.89, -5.55, -16.60%) took the biggest hit. The cost to insure the debt of major banking institutions skyrocketed as concerns spread that the institutions may need to seek fresh capital. However, every major sector took deep losses. In fact, 98% of the volume on the New York Stock exchange was in declining shares. For the first time in history, S&P cut America’s top-notch credit rating one notch to AA-plus from AAA after the close of trading on Friday. The ratings company also said Monday it would slice Fannie Mae and Freddie Mac’s debt rating because the mortgage companies directly rely on the U.S. government. S&P’s move came as a result of concerns over the country’s substantial public debt burden and deep divides within Congress that almost sparked an unprecedented default on U.S. sovereign debt. Moody’s Investor Service, another ratings company, affirmed American’s AAA rating, while Fitch is still performing a review. Many large investors noted the short-term impact of the downgrade may be muted, however, it could foreshadow deeper economic issues. –Fox Business

 Market Close: The Dow Jones Industrial Average plunged –634.76 points, or 5.55 percent, to finish at 10,809.85, well below the psychologically-significant 11,000 mark. The move marks the blue-chip index’s biggest point and percent drop since Dec. 1, 2008.