Market Update: DJIA Hammered After Debt Downgrade; VIX, Gold Futures Skyrocket Bank of America is leading the Dow decliners on a brutal day for U.S. s

The major market indexes are broadly lower this afternoon, as traders respond to Friday night's downgrade of U.S. debt by Standard & Poor's. The ratings agency is still hard at work today, slashing its ratings on Fannie Mae and Freddie Mac as a result of their close ties to the U.S. government. These developments have shaken investor confidence to the core, with oil futures reeling right along with stocks. On the other hand, gold futures have surged further into record-high territory, as traders bail out of risky assets en masse. At last check, the most active crude contract was down $3.47 at $83.41 per barrel, while gold was up $62.40 at $1,714.20 per ounce -- after earlier cruising to a new all-time best of $1,718.20. U.S. bonds have also benefited from the flight to safety, with 10-year yields sinking to their lowest level in more than a year.

At last check, the Dow Jones Industrial Average (DJIA - 11,129.69) is down nearly 315 points, or 2.8%. The S&P 500 Index (SPX - 1,157.61) has given up 41.8 points, or 3.5%, and the Nasdaq Composite (COMP - 2,439.76) is off 93.5 points, or 3.7%.

DJIA price chartChecking in on Dow components, Bank of America (BAC - 6.82) has swallowed a loss of more than 16% to lead the 29 declining blue chips into the red. Only Procter & Gamble (PG - 61.20) has clawed its way higher, up 1% after an upgrade to "outperform" at Bernstein.

The CBOE Market Volatility Index (VIX - 38.25) has bolted higher amid rising uncertainty, with the "fear index" up 19.5% at last look. The VIX jumped earlier to a fresh high of 40.96, in territory not explored since May 2010.

Among equities in focus, Dollar Thrifty (DTG - 62.86) has plummeted 6.7% after falling short of second-quarter profit predictions. On the other hand, BroadSoft (BSFT - 29.63) has racked up a post-earnings gain of about 25%, as traders cheer the firm's upwardly revised full-year forecast. On the brokerage front, Nvidia (NVDA - 12.40) has tumbled more than 4.3% in the wake of a price-target cut, while Dow component Coca-Cola (KO - 66.19) scored a sought-after spot on Goldman Sachs' "conviction buy" list.

-posted by Elizabeth Harrow (eharrow@sir-inc.com)