US open: Stocks hit by debt downgrade, equity volatility picks up

Wall Street was trading on the back foot on Wednesday after Fitch cut the U.S. government's debt rating by one notch.

"Despite the poor eye candy and initial surprise, the recent US downgrade will unlikely cause a significant Treasuries sell-off or prompt a major shift in investor behaviour mainly because investors experienced a similar downgrade from S&P in 2011 and came away unscathed," said Stephen Innes, Managing Partner at SPI Asset Management.

"While Fitch's rating change does bring attention to the problem, it is not market-shattering news."

As of 1500 BST, the Dow Jones Industrials was off by 0.52% at 35,447.63, alongside a 0.81% drop for the S&P 500 to 4,539.98.

But it was the Nasdaq Composite that was faring worst, erasing 1.36% to 14,091.13.

In parallel, the VIX volatility index, which was known among traders as Wall Street's 'fear gauge', was bouncing back by 10.91% to 15.43.

The yield on the benchmark 10-year U.S. Treasury note meanwhile was climbing six basis points to 4.092%.

Overnight, ratings agency Fitch had cut the U.S. sovereign debt rating from AAA to AA+.

According to consultancy ADP, the private sector in the U.S. generated 324,000 jobs in July (consensus: 190,000).

"Today’s print has no implications for our July forecast; we're still looking for 275K headline payrolls and 225K private," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

On the company front, AMD shares were off by 4% despite having beat analysts' estimates for its second quarter earnings.

Dow Jones - Risers

Caterpillar Inc. (CAT) $292.94 1.49%
Merck & Co. Inc. (MRK) $106.58 1.24%
Verizon Communications Inc. (VZ) $33.68 0.75%
Walgreens Boots Alliance, Inc. (WBA) $29.74 0.56%
McDonald's Corp. (MCD) $292.38 0.45%
Johnson & Johnson (JNJ) $169.61 0.43%
Unitedhealth Group Inc. (UNH) $506.39 0.33%
Procter & Gamble Co. (PG) $156.61 0.23%
Walmart Inc. (WMT) $159.30 0.12%
Coca-Cola Co. (KO) $61.83 0.10%

Dow Jones - Fallers

Intel Corp. (INTC) $35.08 -2.01%
Boeing Co. (BA) $234.46 -1.49%
JP Morgan Chase & Co. (JPM) $154.96 -1.41%
American Express Co. (AXP) $167.26 -1.41%
Salesforce.Com Inc. (CRM) $221.29 -1.33%
Nike Inc. (NKE) $107.98 -1.30%
Microsoft Corp. (MSFT) $332.02 -1.28%
3M Co. (MMM) $109.20 -1.23%
Walt Disney Co. (DIS) $88.01 -1.15%
Chevron Corp. (CVX) $160.58 -1.06%

S&P 500 - Risers

Waters Corp. (WAT) $295.04 7.52%
AFLAC Inc. (AFL) $76.15 5.60%
Emerson Electric Co. (EMR) $96.37 5.17%
Humana Inc. (HUM) $480.34 4.85%
Agilent Technologies Inc. (A) $127.01 3.70%
Flowserve Corp. (FLS) $39.28 3.63%
Assurant Inc. (AIZ) $139.65 3.41%
Ipg Photonics Corp. (IPGP) $112.00 3.36%
Pioneer Natural Resources Co. (PXD) $231.20 2.90%
Revvity, Inc. (RVTY) $125.97 2.72%

S&P 500 - Fallers

CenturyLink Inc. (LUMN) $1.85 -9.11%
Johnson Controls International plc (JCI) $64.13 -8.42%
Electronic Arts Inc. (EA) $128.04 -5.94%
Devon Energy Corp. (DVN) $51.33 -4.38%
Allstate Corp (The) (ALL) $109.16 -3.42%
Norwegian Cruise Line Holdings Ltd (NCLH) $18.85 -2.89%
Borg Warner Inc. (BWA) $45.14 -2.86%
Adobe Systems Inc. (ADBE) $534.50 -2.66%
Nvidia Corp. (NVDA) $453.35 -2.52%
KLA-Tencor Corp. (KLAC) $501.46 -2.49%

Nasdaq 100 - Risers

Verisk Analytics Inc. (VRSK) $234.36 2.24%
Incyte Corp. (INCY) $65.07 2.17%
Charter Communications Inc. (CHTR) $417.31 2.08%
Starbucks Corp. (SBUX) $102.59 1.31%
Vodafone Group Plc ADS (VOD) $9.56 1.00%
Walgreens Boots Alliance, Inc. (WBA) $29.81 0.79%
Marriott International - Class A (MAR) $205.33 0.46%
Mondelez International Inc. (MDLZ) $74.79 0.36%
Henry Schein Inc. (HSIC) $79.09 0.30%
J.B. Hunt Transport Services Inc. (JBHT) $204.27 0.17%

Nasdaq 100 - Fallers

Electronic Arts Inc. (EA) $127.37 -6.43%
Qurate Retail Inc. (QRTEA) $0.95 -6.25%
Trip.com Group Limited (TCOM) $38.92 -3.57%
Workday, Inc. (WDAY) $232.65 -2.98%
Nvidia Corp. (NVDA) $451.50 -2.92%
KLA-Tencor Corp. (KLAC) $499.61 -2.85%
Micron Technology Inc. (MU) $68.76 -2.83%
Adobe Systems Inc. (ADBE) $533.69 -2.81%
Wynn Resorts Ltd. (WYNN) $106.10 -2.79%
JD.com, Inc. (JD) $38.93 -2.77%