Media Stocks, Markets Fall After Fitch Downgrades U.S. Credit Rating
02.08.2023 - 19:59
/ deadline.com
Yesterday, one ratings agency affirmed Disney’s credit rating — today another has downgraded the long-term credit rating of the entire United States, sinking media stocks and broader markets.
In a rare move. and a bit of a black eye for the U.S., Fitch lowered its rating on government debt from AAA to AA+, citing fiscal and political uncertainty.
Heading into the close, the DJIA shed 340 points, or nearly 1%. The Nasdaq is down by 2.2%, the S&P 5oo by 1.39% and the Russell 2000 by 1.3%. Nasdaq-listed tech stocks are uniformly in the red with Meta, Amazon, Alphabet and Apple off, respectively, by 3%, 2.79%,2.5% and 1.7%. Roku and Snap are taking a hit. Netflix is down 2.2%.
Shares of Warner Bros. Discovery, which reports quarterly earnings tomorrow morning, are down 2.44%. Disney is off by 3%. Paramount Global by 2.7%.
A displeased Treasury Department called the downgrade “abritrary,” since the White House and Congress had agreed in June to a debt ceiling deal. But Fitch cited a risk of ongoing debt-ceiling drama alongside an erosion of governance.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” according to the Fitch report. See main points of report below.
“You have the debt ceiling, you have Jan. 6. Clearly, if you look at polarization with both parties … the Democrats have gone further left and Republicans further right, so the middle is kind of falling apart basically,” Richard Francis, a senior director at Fitch Ratings, told Reuters.
On Tuesday, former president and 2024 Republican frontrunner Donald Trump was indicted by a Federal grand jury for conspiracy for trying to overturn the results of the 2020 U.S. presidential election.
The last