The Dow Jones closed down 634 points on the first trading day since Standard & Poor's downgraded the U.S's credit rating, falling below 11,000 for the first time since November. The sharp drop on Monday extended Wall Street's almost uninterrupted decline since late July, when the Dow was flirting with 13,000.
The S&P 500 shed 80 points, to 1,119. The Nasdaq dropped 175 points, closing at 2,358.
"We have a pretty decent chance of going into recession, but honestly I really don’t think today will mark the beginning of that," Joe Nocera, an op-ed columnist for the New York Times told WNYC on Monday.
Nocera said despite the bad news for stocks, investors around the world continue to invest in U.S. government issued debt.
"The realty is U.S. Treasuries really are still the safest investment you can possibly have and that was actually shown today when in the panic of the market going more than 600 points down, where did people race to? They raced to Treasuries."
Does the downgrade by S&P meant the U.S. will have troubles paying these Treasuries?
"The U.S. does have the ability to pay its debts, nobody doubts that," Nocera said. "The question is what will happen in November or December when they have the super committee to do more cuts. Will we have more gridlock? Will we be able to figure out a way out of our deficit problem?"
