European and Asian Markets Torpedo to Open Week

Indices across Asia and Europe are down more than 1.5% Monday, as renewed concerns about European sovereign debt and the global economic recovery took front and center. London's FTSE Index is down 1.7% today, with Germany's DAX Index down 1.8%. Fitch downgraded Greece on Friday. Further, markets were surprised when S&P cut Italy's outlook to negative from stable over the weekend, stating that “current growth prospects are weak, and the political commitment for productivity-enhancing reforms appears to be faltering.” According to a Financial Times report, "S&P, in a report published at the weekend, affirmed Italy's A+ long-term rating, the fifth highest, and its top-ranked A-1+ short-term rating. But it lowered Italy's credit rating outlook to negative from stable on the basis of slowing economic growth and “diminished” prospects for a reduction of government debt." Italy's Treasury dismissed the report. Also Monday, Germany reported that private sector growth slowed to its lowest rate since October. In Asia, Japan's Nikkei Index is down 1.5% and China's Shanghai Index is down 2.9%. A CNBC.com report notes that "China's main stock index dropped nearly 3 percent, extending losses to three-and-half month lows, as tightening liquidity hit financials and small caps, while the slowest Chinese manufacturing growth in ten months gave investors another excuse to turn bearish." Japan continues to struggle in the aftermath of this spring's earthquake and tsunami. Sony SNE on Monday lowered its annual earnings guidance to a $3 billion for the year ended March 31, 2011.