Stocks falter after S&P’s Europe downgrade threat

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Stocks are trading mostly lower at midday after Standard & Poor’s expanded its downgrade threat against Europe to include the region’s bailout fund.

The credit rating agency warned on Tuesday that it might cut the fund’s AAA rating if it decides to downgrade a top-rated European nation.

S&P had warned late Monday that it might downgrade any nation that uses the euro, even Germany, which is rated AAA and has Europe’s strongest economy. European markets mostly fell on the news.

The Standard & Poor’s 500 index was down 2 points, or 0.2 percent, at 1,255 shortly before noon Eastern time. The Dow Jones industrial average was up 25, or 0.2 percent, at 12,123. The Nasdaq composite index was down 14, or 0.5 percent, at 2,642.