The ratings agencies Standard & Poor's, Fitch and Moody's have had a rough time in the 2000's. Between missing the disasters at Enron, WorldCom, Tyco International, the credit crisis of 2008 and the downgrading of US debt, they have been under fire for conflicts of interest and incompetence. On Thursday, Standard & Poor's sent out an email message to its subscribers of its Global Credit Portal that French debt was downgraded from AAA. Two hours later, S&P corrected it and affirmed that France was still rated AAA.
Market reaction was swift and immediate. The Stoxx Europe 600 Index kept falling 1.5% and French bonds yields rose 28 basis points on the ten year debt. When yields rise on bonds, prices fall. Commodities, US Equities and the Euro fell briefly.
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