Market Recap: DJIA Swallows 634-Point Loss on S&P Downgrade; VIX Soars 50%

The DJIA, SPX, and COMP extended their slides as the closing bell approached, while gold futures jumped to an all-time high

"Downgrade" was the word of the day on Wall Street today, as investors reacted to Standard & Poor's late-Friday revision to the U.S. credit rating. The major market indexes headed south right out of the gate, and selling pressure intensified as the session progressed -- despite President Obama's attempts to control the damage. "No matter what some agency may say, we've always been and always will be a triple-A country," Obama said, not long after the White House questioned S&P's math. As traders made a mad dash for the relative safety of gold, the Dow Jones Industrial Average (DJIA) steepened its triple-digit deficit to more than 630 points, while the CBOE Market Volatility Index (VIX - 48.00) -- also known as the market's "fear gauge" -- skyrocketed to its loftiest finish since March 2009.
CLOSING SUMMARY – INDICES

CLOSING SUMMARY – NYSE AND NASDAQ

The Dow Jones Industrial Average (DJIA – 10,809.85) swallowed its steepest loss since December 2008 today, giving up 634.8 points, or 5.6%, by the time the bell mercifully sounded. In fact, the blue-chip barometer ended south of the 11,000 level for the first time this calendar year, as not one of its 30 components eked out a win. Pacing the declining equities was Bank of America (BAC), which shed more than 20% amid reports of a legal battle with American International Group (AIG).

Meanwhile, the S&P 500 Index (SPX – 1,119.46) fared even worse than the Dow, backpedaling 79.9 points, or 6.7%, to end at its lowest level since September 2010. In the same vein, the Nasdaq Composite (COMP – 2,357.69) took the hardest hit of the major market indexes, plunging 174.7 points, or 6.9%, to end at its own year-to-date nadir.

Turning to equities in focus, Tyson Foods (TSN) unveiled its fiscal third-quarter earnings ... McDonald's (MCD) reported same-store sales for July ... A price-target cut exacerbated Nvidia's (NVDA) pre-earnings technical problems ... Puts have been the options of choice on blue chip General Electric (GE) ... SunPower Corp. (SPWRA) was hit with a downgrade ahead of earnings ... Qualcomm (QCOM) is trading south of a key long-term moving average ... and today's Quote of the Day comes from CNNMoney.com columnist Paul R. La Monica. While the White House may disagree, La Monica argues that the only thing surprising about the S&P downgrade was the timing. As he writes in The Buzz:

"The combination of an onerous (and growing) debt load and political 'leaders' that make the Keystone Kops look effective is hardly a recipe for a perfect credit score."