US investors wasted no time in reacting to Standard and Poor's downgrade of the country's credit rating. Their sentiment also compounded sentiment of a gloomy world economy, so investors sent Wall Street down, again.

Wall Street was rocked at its core as investors had their first chance to react to Standard & Poor's decision to strip the U.S. of its marquee AAA credit rating.

Investors sold early and sold hard, and as fear and confusion spread, the market kept going lower, ending up with the biggest sell-off since December 2008.

Michael Perves, chief market strategist of BGC Partners said, "The total message from what the market is saying is that we've never dealt with a U.S. sovereign downgrade before. No investor, anywhere, has seen that happen. So there is a lot of confusion about what this really means and I think it will take some time to parse through what the real implications are."

And it is not just the downgrade that's a concern. Investors are worried the global economy will struggle given the recent shocks.

That played out in every corner of the globe. For example in Latin America, Argentina's Merval slumped almost 11 percent, as regional stock markets suffered a major setback.

And despite the lower credit rating, investors flocked to the safety of U.S. Treasury bonds.

All in all, the Dow lost 634 points or 5-1/2 percent. The S&P shed 6.7 percent. And the Nasdaq tumbled 7 percent.