In retrospect, it looks suspicious that the stock market was in as much of a free fall as it was on Thursday and Friday. It is as if the S&P news were leaked purposely or inadvertently to those who could take advantage of the information.
However, it is possible that many deduced it would happen. I thought the huge deficits were were running was excuse enough to reduce the US debt rating. Even though I thought the debt should be downgraded based on the deficits, I didn't think it would happen - or at least not so quickly. After all, the debt rating agencies left stellar bond ratings on CDOs until they had lost much of their value and were clearly a worthless type of bond. And there is the political aspect. The government won't be happy with S&P and that might cut into their business.
I think there is a good chance that S&P will be investigated to see if they purposely leaked information to traders ahead of the downgrade so that someone could profit from this. If the SEC and others don't investigate them, they should to make sure there was no attempt to profit and that making a profit from the downgrade did not enter into anyone's decision making when they reduced the US credit rating.
If the news was already out there for the large traders before the downgrade, then that was the cause of much of the market drop on Thursday and Friday. On Monday, it seems likely it will also have some impact. I'm just not sure how much. I think it will depend a lot on how the news is handled over the weekend.