Markets Still Tanking? Debt Debacle a Yawn on Wall Street

Updated at 11:15 p.m. edt

China's largest credit-rating agency, Global Credit Rating Co., lowered its rating on U.S debt from  A+ to A tonight, calling the American economy a "debt time bomb."

Stateside, Moody's credit rating service said while it has a "negative outlook" on the U.S., for now, at least, it will not lower its  AAA credit rating.

Earlier Fitch, the No. 3 rating service, also said it will not lower the U.S. rating from AAA, but put Washington on notice that it's score remains under review.

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Updated at 4 p.m. edt

President Obama signed the new budget-cutting measure into law this afternoon as Wall Street saw its eighth straight day of losses and a new poll showed Americans are disgusted with the bratty behavior in the debt-ceiling fight.

The Dow fell 265 points to finish at 11,866.84. The NASDAQ closed at 2669,24 plunging 75 points, while the S&P 500 fell 33 points, ending at 1,254.05.

The next nightmare for American markets may be the loss of the AAA credit rating the U.S. has enjoyed for the better part of a century.

"While the agreement is clearly a step in the right direction, the United States, as in much of Europe, must also confront tough choices on tax and spending against a weak economic back drop if the budget deficit and government debt is to be cut to safer levels over the medium term," the credit-rating service Fitch said in a statement.

Standard & Poors and Moody's have already put the U.S. on notice that its pristine rating is at risk.

There are also fears the U.S. could slip into a double-digit recession, especially if it turns out the Tea Party-driven debt law ends up costing more Americans their jobs, as some analysts predict.

The image of elected federal officials continued to slide in the eyes of Americans fed up over the handling of the debt debate, according to a CNN/ORC International poll taken yesterday.

The poll showed 52% of respondents are opposed to the debt ceiling deal while 44% favor it --- and 77% of Americans scoffed at the behavior of lawmakers during the debate.

"When three-quarters say that elected officials are behaving like spoiled children, it's probably safe to say that there are no winners," said CNN polling director Keating Holland.

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The new budget-slashing law did little to immediately boost Wall Street and the global markets as the house-of-cards financial system sways amid tanking economies around the world, including the U.S.

The Dow Jones industrial average dipped below 12,000 shortly after the Senate voted 74-26 to pass the complicated, two-tiered measure that for more than a month gridlocked Washington, ravaged the financial markets and angered Americans already fed up with the shenanigans of their elected officials.

"Our economy didn’t need Washington to come along with a manufactured crisis to make things worse," President Obama said after the vote. "It’s pretty likely that the uncertainty surrounding the raising of the debt ceiling, for both businesses and consumers, has been unsettling, and just one more impediment to the full recovery that we need."

He added, "And it was something that we could have avoided entirely."
 
Elements of the Tea Party, seen by some observers as having been duped into carrying the water for Wall Street and corporate interests, has argued that the economy would turn around by dialing down the $14.3 trillion federal debt.

The European banking crisis, stagnant U.S. employment (with more layoffs coming as a result of the new budget-slashing debt law) and unrest in the Middle East oil patch neighborhood are among the factors behind the problems for the markets, analysts believe.