Stocks sank, extending the worst U.S. slump since the bear market in 2008, while Treasuries gained and gold reached a record after Standard & Poor’s cut the nation’s credit rating. The Dow Jones Industrial Average lost as much as 605 points, led by a 22 percent slide in Bank of America Corp.

The S&P 500 lost 5.5 percent to 1,133.76 at 2:44 p.m. in New York, its lowest level since September. The Stoxx Europe 600 Index slid 4.1 percent, the most in more than two years, to extend a drop from its 2011 high to 21 percent. Treasuries, benchmarks of the nation’s $34 trillion debt market that is more than twice the value of American equities, rallied. The 10-year note yield fell as much as 23 basis points to a two-year low of 2.32 percent and the two-year rate reached a record low. The S&P GSCI commodities index lost 3.9 percent.

Equities extended losses after the ratings cut prompted S&P to lower debt rankings on Fannie Mae, Freddie Mac and other lenders backed by the government and reduce the credit outlook on Warren Buffett’s Berkshire Hathaway Inc. to negative. President Barack Obama, breaking his silence on the downgrade, said the main obstacle facing the U.S. is the “lack of political will in Washington” to solve the country’s problems. For more visit: Bloomberg.com

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