Brazil's sovereign rating was cut to junk by Standard &Poor's, taking away the investment grade the country enjoyed forseven years, as President Dilma Rousseff's struggles to shore upfiscal accounts amid a faltering economy.

The country's rating was reduced one step to BB+, with anegative outlook, S&P said in a statement after markets closed.Brazil's largest U.S. exchange-traded fund tumbled 6.6 percent inlate trading along with American depositary receipts for Petrobras,the state-controlled oil company.

The downgrade, and S&P's warning that another cut ispossible, puts pressure on the economic team led by FinanceMinister Joaquim Levy to win passage of measures that would shoreup the country's fiscal situation by cutting spending or raisingtaxes. Rousseff has been unable to find support for her initiativesamid an investigation into corruption at the state- controlled oilcompany that allegedly occurred while she was its chairman, sendingher popularity to a record low and generating calls for herimpeachment.