Nightly News | August 02, 2011
BRIAN WILLIAMS, anchor: And after all those dire warnings that the stock market might tank if Congress didn't pass the debt ceiling increase, they passed it, today the stock market tanked. Big concerns about the state of the economy drove the Dow down nearly 266 points. Nasdaq fell 75. S&P way down, almost 33 points, giving up its gains for the whole year.
WILLIAMS: With us tonight from Chicago with more on what we should make of all this, Diane Swonk , chief economist, senior managing director at Mesirow Financial . Diane , so much to ask you about. First of all, gold is up $40, what does that mean? Moody's, the organization that gives the kind of financial rating for things like the United States , has given the US a negative outlook, though that's not a downgrade. I guess there's no question why the markets are reacting.
Ms. DIANE SWONK (Mesirow Financial Chief Economist): Absolutely. What we saw today was everything from people still worrying about the economy, worrying about the dollar and what's going to happen to our credit rating , despite the good news that the debt ceiling's been passed and people will get paychecks and their Social Security checks sent out tomorrow. That's very important, but that's only one piece of the uncertainty we face. The US economy has clearly been in a stalled status recently. We had more -- little bit more income in the month of June, but only a little bit, and held onto more of it. Consumers saved a little more as they cut back on spending, even with declines in energy prices. The only silver lining is much of those declines was in auto sales, and we did find out today July auto sales actually picked up as the automakers started to restock and offer those discounts again. Consumers just won't buy unless they've got discounts. But I think what's really important on this debt ceiling is the ongoing uncertainty we have about the debt rating of the US economy . Even though Moody's confirmed that AAA status, as you mentioned, we still don't know what our credit rating will be as a country going forward. This has been very embarrassing as a country, and that's going to be very important going forward. Uncertainty is really hard as a headwind in an economy where we're only treading water, it really acts almost as you don't know if the next wave will put you under.
WILLIAMS: All right, tough note to end on. Diane Swonk from Chicago tonight , thanks for being with us, as always. And