(NEW YORK) -- Red arrows were the order of the day on Wall Street Monday.
The Dow Jones Industrial average dropped more than 450 points in afternoon trading Monday, minutes before U.S. President Barack Obama was set to address the first-ever Standard & Poor's downgrade of U.S. debt. It only got worse from there.
As Obama spoke from the White House to downplay the significance of S&P's downgrade, the Dow flirted with a 450-point decline. After his speech, the DJIA nosedived, down 600 points.
Stocks opened sharply lower in morning trading and by mid-morning, the credit rating firm downgraded the debt of mortgage finance agencies Fannie Mae and Freddie Mac, sending stocks still lower.
Gold surged today by $47 to a record $1,700 an ounce.
Investors were hoping for some sign that the steep market selloff of the last three weeks would abate. Those hopes were dashed when S&P annouced the downgrade of the mortgage debt agencies, which are now owned by the U.S. government following their takeover in the 2007 financial crisis. Lower ratings on U.S. bonds and mortgage debt could mean higher interest rates, creating still more drag on the faltering U.S. economy.
Though government officials sought to find fault with S&P's assessment, pointing out that the agency had made a $2 trillion error in its math, others say rampant government spending led to the downgrade.
"If we were running our affairs properly we wouldn't have to worry about S&P, Moody's and Fitch...," Paul O'Neill, Treasury secretary in the Bush administration, told ABC News.
Since the late Friday announcement of S&P's downgrade of the U.S. credit rating there were efforts across the world to calm markets. All weekend the White House has been fighting in some very strong language, calling the move "amateurish" and "breathtaking."
A managing director at Standard & Poor's told George Stephanopoulos on Good Morning America today that he has no second thoughts about the decision to cut the U.S. debt rating.
With global stocks sinking early Monday, S&P's David Beers said the agency's decision was based on factors including damage done to the U.S. reputation over the controversy surrounding the debt ceiling and concerns that underlying public finances are on an unsustainable path.
Asked if he had any second thoughts about the downgrade, Beers replied, "absolutely not."
Returning from Camp David Sunday, the president waved off reporters asking questions about the first downgrading ever of U.S. credit.
Obama and his economic team spoke with leaders from around the world Sunday night, bracing for the impact from the move by S&P.
Even with the administration's heated criticism of S&P over the downgrading, the rating agency is not only standing by the decision, it is saying a further downgrade is possible if the United States doesn't solve its debt problem in two years.
The rating agency's managing director John Chambers said on ABC News' This Week with Christiane Amanpour that there's "at least a one in three chance of a downgrade over that period."
He has blamed the downgrade squarely on Washington politics, saying "this is not a serious way to run a country."
"Our job is to hold the mirror up to nature, and what we are telling investors is that we have a spectrum that runs from AAA to D," Chambers told ABC News. "And what we're seeing is threat the United States government is slightly less credit worthy."
Individual investors would do well to wait and see, says one personal finance expert.
"If the market opens weak, I'm a buyer," Melody Hobson, president of Chicago investment firm Ariel Investments told ABC News. "If I'm an individual investor and I'm scared to death and I feel like I can't sleep at night, I certainly wouldn't act on Monday. I'd let the dust settle."
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