Stocks remained deep in the red on Monday in midday trading, after Standard & Poor’s cut its credit rating outlook for the United States to “negative.”

At noon, the Dow Jones industrial average was down 211 points or 1.7 per cent, to 12,131. The broader S&P 500 was down 21 points or 1.6 per cent, to 1299.

The downturn was widespread, hitting all 10 subindexes within the S&P 500. However, economically sensitive areas of the market were hit the hardest, suggesting that investors believe that drastic reaction on the part of the U.S. government to the country’s fiscal hole could threaten the economic recovery.

Industrials fell 1.8 per cent, while information technology and energy stocks fell 1.7 per cent each. Consumer discretionary stocks fell 1.5 per cent.

Defensive stocks also fell, suggesting overall disenchantment with stocks – but they held up a little better. Consumer staples and utilities fell 1 per cent each, while telecom services and health care stocks fell 1.4 per cent each.

In Canada, the S&P/TSX composite index was down 138 points or 1 per cent, to 13,661.

Information technology stocks showed modest gains, rising 0.9 per cent after Research In Motion Ltd. rebounded. As well, defensive telecom services and consumer staples were relatively flat.

However, energy stocks were the biggest laggards, falling 1.5 per cent after crude oil fell to about $107 (U.S.) a barrel, down $2.60. Industrials fell 1.2 per cent and financials fell 0.8 per cent. As well, materials fell 0.9 per cent – even as the price of gold rose about $10 an ounce, to a new record high of $1495.