S&P cuts Spain credit rating two notches to BBB-minus

Standard & Poor's on Wednesday cut Spain's sovereign credit rating by two notches to BBB-minus, citing a deepening economic recession that is limiting the government's policy options to arrest the slide.

The downgrade comes with a negative outlook reflecting the firm's view that there are significant risks to economic growth and budgetary performance, plus a lack of a clear direction in euro zone policies.

S&P's move brings it in line with Moody's Investors Services, which also has Spain on watch for a downgrade from its Baa3 rating. Both ratings are just on the cusp of junk status, while Fitch Ratings has Spain rated BBB, one notch higher but with a negative outlook.