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Before the bell: S&P futures -30.75, Nasdaq -55.00.
08.08.2011 13:28:00

An unprecedented downgrade of U.S. debt has prompted a precipitous drop in stock futures, such that the cash market is expected to open with a loss of at least 2%. The news has also driven aggressive selling abroad, where many of the major bourses of Europe are down in excess of 1% and most of Asia's averages fell more than 2%. The global sell-off has spurred strong buying in precious metals. In turn, gold prices are up more than 3% to a new record high above $1700 per ounce, while silver is up about 4% to $39.74 per ounce. Silver is still shy of the multi-month high above $40 per ounce that it set last week, though. Want for safety has sent traders into Treasuries, too, despite the US debt downgrade. The action has taken the yield on the 2-year Note to a new record low closer to 0.24% and the yield on the benchmark 10-year Note back below 2.50%. The dollar has maintained a buying bid this morning; after easing off of its morning high, the greenback is clinging to a 0.2% gain against a collection of competing currencies. Outside of the downgrade headline, there isn't much news for traders to digest -- the economic calendar is empty and the pace of quarterly earnings announcements has begun to slow.

Company news:
BroadSoft Inc. (BSFT) surged 22 percent to $28.85. Company forecast earnings in 2011 of at least 90 cents a share, topping the average analyst estimate of 75 cents and higher than the company’s previous estimate of no more than 77 cents.
Dynegy Inc. (DYN) sank 19 percent to $3.97. The third- largest independent U.S. power producer reported a second- quarter net loss of 95 cents a share, wider than the average estimate of a loss of 70 cents a share.

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