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Dow, S&P Breach Key Support; UK Credit Ratings Cut As Brexit Fallout Continues

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Brexit fallout continued Monday as U.S. stocks again followed European bourses sharply lower, with steep declines by American Express (AXP) and JPMorgan  (JPM).

The major indexes closed off their intraday lows, but they still finished well in the bottom half of their session ranges. The Nasdaq sank 2.4%, the S&P 500 shed 1.8%, and the Dow Jones industrial average gave up 1.5%, with the latter two breaching their 200-day moving average lines for the first time since March.

Volume was slightly lower across the board vs. Friday, according to preliminary figures, but it was still intense overall. Banks and oil stocks were among the hardest hit in the stock market today. West Texas Intermediate crude slid 2% to $46.74 a barrel, while gold prices climbed 0.5% to $1,328.90 an ounce.

American Express led the Dow's decline with a 4% drop, adding to its 5% plunge in heavy volume Friday. Shares are now near four-month lows and are 29% off their 52-week high. JPMorgan fell 3%, bringing its two-session loss to 10%.

Only two blue chips managed to avoid the downdraft: Johnson & Johnson (JNJ) and Verizon Communications (VZ). J&J is just off a record high, while Verizon climbed past a 54.59 cup-base buy point in busy trade.

The few industry groups managing small gains were all defensive in nature: utilities, food and beverage, and soap. On the IBD 50, electric utility WEC Energy Group (WEC), Dollar General (DG) and B&G Foods (BGS) eked out gains of 1% or more each.

But Acuity Brands (AYI), chip designer MaxLinear (MXL) and Ubiquiti Networks (UBNT) each lost about 6%, while BroadSoft (BSFT), GrubHub (GRUB) and LifeLock (LOCK) shed nearly 5% apiece.

Britain's credit rating suffered downgrades following last week's Brexit vote. Standard & Poor's on Monday lowered its U.K. credit rating by two notches to AA. Fitch also cut its rating to AA.

Economic data slated for Tuesday include first-quarter GDP, the S&P/Case-Shiller Home Price Index for April, and the Conference Board's Consumer Confidence Index for June.