POSTED: Thursday, October 11, 2012 - 8:00am
UPDATED: Thursday, October 11, 2012 - 8:12am
NBC News — Standard & Poor's downgraded Spain's government debt to one step from junk status late wednesday. Financial markets in Asia retreated on the news but improved during the European trading session. Germany's DAX, the CAC-40 in France and the FTSE 100 index of leading British shares saw slight gains. Wall Street was also poised for a solid opening.
S & P's downgrade could make it even more expensive for the Spanish government to borrow money. The agency lowered Spain's credit rating by two notches to the lowest investment grade level, from Triple-B+ to Triple-B-. It said the Spanish government's hesitation to request a bailout was quote, "potentially raising the risks to Spain's ratings." The agency also warned of the impact of Spain's deepening recession and increasing social discontent.