Augusta, it seems pretty clear that the market was already taking account for the rating cut. That being said, you can be sure the hedgies are going to use the news to hit us with a short scare Monday AM, but the market will bounce after that.
BTW, I could be wrong, but I am betting that if Treasuries are getting hit and rates are going up early in the week, The Fed is planning on stepping in to buy them up and moderate any real increase in interest rates. While I hate The Fed, it is times like this that I can agree with them stepping in, as any real increase in rates that hit the market, could put a dagger in what is left of the economy and take us from a possible double ip, straight into a real recession.