Ratings agency Standard & Poor’s has rattled Wall Street by downgrading investment banks Merrill Lynch, Lehman Brothers and Morgan Stanley.

S&P’s said the “outlooks on the large financial institutions sector in the U.S. are now predominantly negative” and that “the pace and extent of earnings improvement could be considerably more muted than we previously anticipated.”

The revised 1Q GDP figures to be released next week, will likely support the sense of optimism that pervades the market, according to a report by MarketWatch.

Economists expect the gross domestic product to be revised up to 0.9% in the first quarter, from the initial estimate of 0.6% when the government releases the data on Thursday morning.

All was quiet in the Far East and Europe in gold and silver trading yesterday morning. Then the boys in New York showed up for work…and away went the prices to the upside.