Looming S&P downgrade hits euro zone markets

Standard & Poor's was poised to downgrade the credit ratings of several euro zone countries on Friday, including France and Austria but not Germany or the Netherlands, rattling markets in the first blow of the new year for the troubled single currency. In another potential setback, talks on a debt swap by private creditors seen as key to averting a Greek default that would rock Europe and the world economy broke up without agreement in Athens, although officials said more talks are likely next week. Four euro zone government sources said S&P would cut a number of the currency bloc's sovereigns, making an announcement after New York markets close at 4 p.m. EDT (2100 GMT). A euro zone official said France and Austria would lose their top-notch triple-A ratings, and Slovakia would also be affected. The Financial Times reported that France and Austria would each drop one notch to AA+.

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