FTSE falls over credit rating fears

In mid-morning trading the FTSE 100 is down 20 points because traders are worried that the US's credit rating will be downgraded. 

Stock markets are no longer celebrating the deal that was struck yesterday between the Democrats and Republicans to avoid an Armageddon-style default – the focus has now switched to the US credit rating as traders wonder whether or not it will remain unchanged. 

The agreement reached has indeed brought about an end to the shutdown and pushed back the debt ceiling talks until February, but investors simply view this as the government hitting the snooze button yet again. Ratings agency Fitch is edging even closer to lowering the US credit rating, and if other agencies follow suit we could see a repeat of August 2011. 

Travis Perkins is benefiting from the recovery in the UK housing market. The building materials supplier is on track to meet full-year earnings, even though its consumer businesses such as Wickes underperformed. SAB Miller reported a 4% rise in first-half revenue, as sales were boosted by growth in Africa and Latin America. British Sky Broadcasting is up nearly 5% this morning after the company revealed a 7.5% increase in revenue, despite experiencing increasing competition from other broadband providers. 

In the US, we are expecting the Dow Jones to open 120 points lower at 15,253, as profit-taking on index futures sets in.


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