Stock market today: Asian shares slip, echoing Wall Street's retreat from its rally

TOKYO (AP) — Asian shares dipped Wednesday after Wall Street took a step back from its big rally as markets tried to digest a slew of earnings.

Japan's benchmark Nikkei 225 dove 2.1% in afternoon trading to 32,768.08. Australia's S&P/ASX 200 fell 1.3% to 7,356.60. South Korea's Kospi slid 1.7% to 2,620.74. Hong Kong's Hang Seng dipped 2.1% to 19,590.86, while the Shanghai Composite lost 0.9% to 3,259.93.

Investor optimism was hurt by Fitch Ratings downgrading the United States government’s credit rating, citing rising debt at the federal, state, and local levels. The rating was cut Tuesday one notch to AA+ from AAA, the highest possible rating. In 2011, the ratings agency Standard & Poor’s stripped the U.S. of its prize AAA rating.

Treasury Secretary Janet Yellen said the move by Fitch was based on outdated data, noting the U.S. economy has rapidly recovered from the pandemic recession.

“Some negativity was permeating across Asian equity markets mid-week thanks to Fitch downgrade news. Whilst not a game-changer, news that Fitch downgraded the U.S. credit rating by a notch was enough to put risk appetite on the back foot, as evidenced by the red numbers across the board,” said Tim Waterer, chief market analyst at KCM Trade.

On Wall Street, the S&P 500 lost 12.23, or 0.3%, to 4,576.73, coming off its fifth-straight winning month. The Nasdaq composite sank 62.11, or 0.4%, to 14,283.91. The Dow Jones Industrial Average squeezed out a gain of 71.15 points, or 0.2%, to 35,630.68, even though most of the stocks within it weakened.

Travel-related stocks helped drag the market lower after they gave up some of their big gains from earlier in the year. Norwegian Cruise Line lost 12.1%. Expectations were high for it and rivals after its stock soared 80% for the year...