Investors shrug off Moody's downgrade as stocks, U.S. borrowing costs stay largely flat

Investors largely shrugged off a downgrade of the U.S.' credit rating in Monday trading, as stocks ended the day mostly flat.

The Dow Jones Industrial Average added more than 130 points for an increase of 0.32%. The broader S&P closed up 0.09% and the tech-heavy Nasdaq gained 0.02%.

Late Friday, Moody’s became the third and final major ratings agency to downgrade U.S. debt, reducing it by one notch from AAA to Aa1. Credit ratings agencies help determine how reliably a country can pay off its debt.

Yet the market for U.S. government debt has so far remained mostly stable. As of 4 p.m., the yield on the 10-year Treasury note — the government’s benchmark loan asset — was only a few percentage points above where it traded Friday, climbing to 4.46%. That remans well below the most recent high of 4.59% briefly seen last month.

“The downgrade itself doesn’t seem so far to have made much of a market splash,” analysts at the Capital Economics research consultancy wrote in a note.

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