Wall Street Breakfast: Must-Know News

S&P downgrades Italy. S&P cut Italy's credit rating to A from A+, with outlook negative, citing the political situation as limiting the nation's ability to respond effectively to its debt crisis. S&P said the negative outlook "reflects our view of additional downside risks to public finances related to the trajectory of Italy's real and nominal GDP growth." Italy's FTSE MIB is -3.2% this morning and the euro is -0.4% against the dollar (1:30 ET). How much austerity? Greek Prime Minister George Papandreou is considering holding a referendum on whether to stay the austerity course or exit the euro. Sources say Papandreou feels like his government needs a mandate to continue pushing ahead with reforms, and some in his cabinet are pressing for drastic measures. Greece has denied the report. Meanwhile, new calculations show more of the U.K.'s deficit isn't caused by a slow economy but is instead permanent, raising estimatesComplete Story »