world stocks drop on Ireland rating cut

Euro, world stocks drop on Ireland rating cut ; The euro fell against the dollar and world stocks dropped on Friday, weighed by renewed concerns over euro zone debt after a multi-notch downgrade of Ireland's credit rating. Moody's slashed Ireland's credit rating by five notches, and warned that further downgrades could follow if Ireland didn't stabilize its debt situation. [ID:nLDE6BG0EG]

The move followed Fitch's downgrade last week, cutting Ireland's credit level by three notches. Earlier this week, Moody's placed Spain and Greece on a review for possible downgrades. World markets gained little comfort after leaders at a European Union summit agreed to create a permanent financial safety net from 2013, though the EU provided no new measures to deal with the immediate crisis.

Wall Street has reacted with trepidation to news that Moody's Investors Service cut Ireland's credit rating with a negative outlook," said Joseph Hargett, analyst at Schaeffer's Investment Research in Cincinnati, Ohio. "What's more, many traders are disappointed with the European Union's response to euro-zone debt issues following a two-day summit."

In New York trading, the euro extended losses against the dollar to hit a two-week low after a drop below $1.32 triggered automatic sell orders.

The euro slid as low as $1.3138 on trading platform EBS EUR=EBS, and was last down 0.7 percent $1.3147.

European stock markets followed, with the FTSEurofirst 300 index of leading European shares .FTEU3 down 5.27 points, or 0.47 percent, to 1126.03.

MSCI's all-country world stock index .MIWD00000PUS dipped 0.2 percent. The Thomson Reuters global stock index .TRXFLDGLPU fell 0.3 percent.

U.S. equity indexes struggling in late-morning trading. The Dow Jones industrial average .DJI was down 24.79 points, or 0.22 percent, at 11,474.46. The Standard & Poor's 500 Index .SPX was down 0.64 points, or 0.05 percent, at 1,242.23. The Nasdaq Composite Index .IXIC was up 7.33 points, or 0.28 percent, at 2,644.64. For the latest updates PRESS CTR + D or visit Stock Market news Today

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