Credit rating agency, Standard & Poor's, yesterday cut its outlook on the US economy from 'stable' to 'negative' and warned that its prized 'AAA' rating was in danger unless Washington delivered a budget deficit plan to reduce the mountainous national debt, forecast to reach USD17.3 trillion by 2020.

S&P's warning sparked a run on shares with the Dow Jones Index coming off by 1.14% at the bell, with earlier European markets plunging by over 2% on this news combined with the more localised bad news of possible eurozone defaults on debt repayments.

Meanwhile, the safe haven for investors, gold, jumped to a record USD1,488 per ounce on other fears that the US dollar could lose its status as the global reserve currency.