Yesterday the market plummeted when Standard and Poor downgraded Greece’s debt rating to junk. We suffered the largest single-day loss in months, with the DJIA closing below 11,000.

Today the rating agency comes around with another whopper, downgrading Spain’s debt rating to AA. While the news may not have the same extreme impact on the Dow Jones, it’s yet another sign that the world hasn’t left the recession behind.

Update: Here’s the Wall Street Journal:

Just one day after roiling global markets with downgrades for both Greece and Portugal, Standard & Poor’s Corp. on Wednesday downgraded Spain’s longterm credit-rating to double-A with a negative outlook.

“We now believe that the Spanish economy’s shift away from credit-fuelled economic growth is likely to result in a more protracted period of sluggish activity than we previously assumed,” Standard & Poor’s credit analyst Marko Mrsnik said.

The euro took a hit, falling to a one-year low against the dollar. Which is good news for any of my fellow Americans traveling in Europe about now, not such good news for Europeans traveling in the United States.

Update X2: Reuters:

The outlook is negative, reflecting the possibility of another downgrade if Spain’s fiscal position worsens more than S&P currently expects, the agency said in a statement.

“We now project that real GDP growth will average 0.7 percent annually in 2010-2016, versus our previous expectations of above 1 percent annually over this period,” S&P said.

Spain is one of the world’s top debtor nations, owing external debts of $2.55 trillion. The problem is that Spain’s GDP is only $1.37 trillion, so we’re talking external debt totaling 186.1% of GDP. For perspective, as bad of fiscal health as the United States is in we owe 96.5% of GDP.