Italy Lashes Out After S&P Downgrade

Silvio Berlusconi’s office reacted angrily to Standard & Poor’s downgrade of Italy’s credit rating today, insisting that it had a solid majority in parliament and was taking the necessary steps to solve Italy’s debt crisis, the New York Times reports. “The evaluations of Standard & Poor's seem dictated more by behind the scenes reports in newspapers than reality,” the government said in a statement, “and seems influenced by political considerations.”

The move actually didn’t much rattle stocks; the Euro Stoxx 50 index was actually up almost 2% by midday. But the yield on Italian bonds shot up to 5.59%, increasing the beleaguered country’s borrowing costs. “Just when everyone was waiting for Moody’s to downgrade Italy, S&P gets in first with what is a much more damaging downgrade,” one securities analyst tells MarketWatch. Moody’s has extended its review period for the country. (More Italy stories.)