The Treasury sold $35 billion of two-year notes on Aug. 23 at a record low yield of 0.22 percent as investors continued to seek the world's safest securities as refuge from financial market turmoil and a slowing economy. It was the first of that maturity to be sold after the downgrade.

Dollar Gains

The Dollar Index, which IntercontinentalExchange Inc. uses to track the world's reserve currency against six major trade partners, gained 0.3 percent on Aug. 8. The dollar has gained 0.6 percent this month, the sixth-biggest advance among 10 developed-nation currencies, according to Bloomberg Correlation- Weighted Currency Indexes through Aug. 23. The biggest gainer is the franc, up 3.9 percent.

S&P, a New York-based unit of McGraw-Hill Cos., erred when it lowered the ranking and the U.S. merits a "quadruple A," Warren Buffett, the chief executive officer of Omaha, Nebraska- based Berkshire Hathaway Inc. said in an Aug. 6 interview. Berkshire Hathaway made its biggest bets on the stock market on Aug. 8, the day the downgrade sent the S&P 500 to its worst plunge in more than two years, Buffett said in a television interview with Charlie Rose broadcast Aug. 15 on PBS.

'Very Strong'

Under S&P's definitions, debt rated AA is barely different from AAA securities and shows that a borrower's ability to "meet its financial commitment on the obligation is very strong."

Stocks were falling before S&P took action as record interest rates in Spain and Portugal spurred the European Central Bank to resume bond purchases and Congress debated the U.S. debt ceiling, said Warren Koontz of Loomis Sayles & Co. in Boston. The S&P 500 slumped 4.8 percent on Aug. 4, its biggest retreat since 2009, and had lost 11 percent since July 22 as reports showed the world's largest economy grew 0.4 percent in the first quarter and 1.3 percent in the second.

"The downgrade wasn't good, but more important for the selloff was the concern about Washington gridlock over the debt ceiling and the slowdown in Europe," Koontz, who helps manage about $160 billion as head of U.S. large-cap value stocks at Loomis Sayles, said in an Aug. 23 telephone interview. "If we hadn't been in an economic soft patch and if we hadn't had the debt-ceiling ruckus, then we might not have had the downgrade, so I don't think the timing was a surprise."

Worse Than Market

McGraw-Hill declined 15 percent in the two trading sessions following the downgrade, more than twice the S&P 500's loss in the same period.