After a week of rising equity markets, Friday morning saw a sell-off in the Dow Jones Industrial Average and S&P 500. After Amazon reported poor earnings on Thursday afternoon, and Visa lowered its revenue forecast for the remainder of 2014, investors got spooked and started sending the major indexes lower. Prior to Friday morning's trading, the week had been fairly positive, with a relatively good earnings season so far, and few changes in overseas' conflicts. In earnings news, Caterpillar, AbbVie, Dr. Pepper Snapple, Ford, Pepsi, Coca-Cola, Apple, Boeing, and others turned in positive results that beat or met analysts' expectations. On the other side of the coin there is AT&T, Microsoft, and McDonald's all missed analysts' views. In macro news, durable goods and initial jobless claims both came in better than expected this week, and on Friday the IMF cut its global growth outlook to 3.4% from 3.6%. Friday morning also saw a positive durable goods report, with durable goods orders rising 0.7% for June, compared to the estimate of 0.5%. Initial jobless claims came in at 284,000 this week, below the 307,000 expected. In the bond markets, 10-Year Treasury yields rose slightly throughout the week, starting off on Monday at 2.49 and ending off Thursday at 2.52. Below, we look at all of Moody's municipal bond upgrades and downgrades from the past week.

Upgrades

• Gallatin County Elementary School District No. 7, MT: Moody's upgraded this school district to Aa2 from Aa3. The upgrade reflects the district's strong growth trends and somewhat improved financial position. The district has a large, relatively diverse, growing tax base, and strong socioeconomic profile. Additionally, the district's debt burden is manageable, though its pension exposure is somewhat high.
• City of Gainesville, TX: Moody's upgraded this city to Aa3. The upgrade to Aa3 reflects the city's strong financial position supported by a recently strengthened reserve policy and diverse, moderately-sized tax base that is expected to expand over the medium-term. The rating also incorporates a below average socioeconomic profile and average debt burden.
• Town of Cumberland, RI: Moody's upgraded this town to Aa3 from A1. The Aa3 rating incorporates the town's improved financial position with satisfactory reserve levels, moderately sized tax base, and a manageable debt burden. The rating also factors the significantly reduced liabilities for pension and OPEB following recently implemented reforms.
• Beacon City School District, NY: Moody's upgraded to Aa3 from A1 the rating on New York State Dormitory Authority School District Revenue Bond Financing Program Refunding Revenue Bonds, Series 2012H. The upgrade to Aa3 follows the upgrade to Aa1 from Aa2 of the State of New York's general obligation rating. The ratings reflect our weak link pooled methodology. Additional credit considerations include availability of funds, timing of state aid payments, state aid trend, strength of notification requirement, and timing between notification and intercept.
• City of Suffolk, VA: Moody's upgraded this city to Aa1 from Aa2. The upgrade to Aa1 reflects the city's sound financial position that continues to improve and is supported by ample reserves and strong liquidity. The rating also reflects the city's sizable and diverse tax base that has substantial development potential, average wealth levels, and above-average, but manageable debt burden.

Downgrades

• Albany, MN: Moody's downgraded this city to A3 from A2. The A3 rating primarily reflects the city's diminished operating reserve position following a significant draw on General Fund cash to cover road improvement capital outlay. Though city officials report a modest final disbursement from the Minnesota Department of Transportation (MNDOT) will arrive in fiscal 2014, General Fund reserves are expected to remain narrow in the near to medium term.
• City of Canton, IL: Moody's downgraded this city to A3 from A2. The downgrade of the GOULT rating to A3 reflects the city's decline in reserve levels due to consecutive operating deficits with limited financial flexibility as a non-home rule city, an elevated debt burden and a local economy with a below average socio-economic profile and limited new development.
• PA State Public School Building Authority's Current Year Intercept Program pools: Moody's downgraded the ratings on four pools of Qualified School Construction Bonds - Direct Subsidy (QSCBs) and three pools of Qualified Zone Academy Bonds - Direct Subsidy (QZABs) issued through the Pennsylvania State Public School Building Authority (SPSBA) to A1 from Aa3. The rating on the SPSBA Current Year Intercept Program was downgraded to A1 from Aa3 on July 22, 2014 in connection with the rating downgrade of the Commonwealth of Pennsylvania.
• City of Westland, MI: Moody's downgraded this city to A2 from A1. The A2 rating reflects the city's manageable debt burden with rapid repayment, modest reserves, large but depreciating tax base, and weakening socioeconomic indicators.
• Antelope Valley Joint Union High School District, CA: Moody's downgraded this school district to A1 from Aa3. The downgrade reflects the district's weakened financial position evidenced by large operating deficits, significant draw down in fund balance levels, and weak liquidity position. The rating also incorporates the district's sizeable tax base which appears to have stabilized, as well as debt and pension burdens that are low relative to similarly-rated California school districts.
• Pennsylvania: Moody's downgraded the Commonwealth of Pennsylvania's outstanding $11.1 billion general obligation bonds to Aa3 from Aa2. The downgrade of the general obligation rating to Aa3 reflects the commonwealth's growing structural imbalance, exacerbated by the fiscal 2015 enacted budget that depends on non-recurring resources; a weak GAAP balance position that will further deteriorate based on the budget's one-time measures; and the expectation that large and growing pension liabilities coupled with modest economic growth will limit Pennsylvania's ability to regain structural balance in the near term.
• Atlantic City, NJ: Moody's downgraded this city to Ba1 from Baa2. The downgrade to Ba1 reflects the city's significantly weakened tax base, revenue-raising ability, and broader economic outlook. These result from ongoing casino revenue declines, expected near-term casino closures, and the impact of sizable casino tax appeals, all of which has stemmed from increased competition from casinos in neighboring states. The rating also factors in the city's still-substantial tax base dominated by a pressured gaming industry (nearly 70% of assessed values), narrow financial cushion, very weak residential socioeconomics and an increasing debt burden.
• City of Mount Clemens, MI: Moody's downgraded this city's issuer rating to A2 from Aa3, and has concurrently downgraded to A3 from A1 the rating on$750,000 of the city's outstanding general obligation limited tax (GOLT) debt that is secured by the pledge and authorization to levy a tax within statutory and charter limitations to pay debt service. The A2 issuer rating primarily reflects notable depreciation of the city's modestly-sized southeastern Michigan tax base, a below average socioeconomic profile, and limited revenue raising flexibility. The rating also incorporates the city's currently healthy level of financial reserves offset by the prospect of narrowing, above average debt burden, and long term risks posed by exposure to underfunded defined benefit pension liabilities. The A3 rating on the city's outstanding GOLT debt incorporates a one-notch distinction from the issuer rating given the lack of a dedicated and unlimited tax levy to repay debt service.
• City of Watsonville Water Enterprise, CA: Moody's has downgraded this city's water enterprise to A2 from A1. The downgrade primarily reflects the system's weakened financial position evidenced by limited liquidity levels and below average debt service coverage consistent with similarly rated issuers. The rating also considers the relatively small customer base with below average wealth levels, elevated debt ratio, and future capital needs.
• Bayonne, NJ: Moody's downgraded the enhanced Municipal Qualified Bond Act financing level ratings to A3 from A2 for Jersey City and Bayonne City, NJ. This action concludes a review of these cities' enhanced ratings, which had been put on review following the downgrade of the State of New Jersey's MQBA programmatic level ratings.
• Maple Valley Schools, MI: Moody's downgraded this school district's outstanding GO debt to A3 from A2. The A3 underlying rating reflects the district's narrow general fund reserves, modestly-sized tax base, as well as it's above average debt burden and exposure to an underfunded cost-sharing retirement system.
• Mora, MN: Moody's downgraded this city to A2 from A1. The A2 rating primarily reflects the city's narrowed operating liquidity position following the absorption of considerable capital cost overruns, and satisfactory operating performance with some revenue pressures. The A2 also captures the city's small and declining tax base, moderate tax base concentration, below average socioeconomic traits, above average debt levels, and moderate long term risk posed by exposure to an underfunded retirement plan.
• County of Rock Island, IL: Moody's downgraded this county to A3 from Aa3. The downgrade to the A3 rating reflects six straight General Fund operating deficits that have resulted in a substantial decline in reserve levels, coupled with increased stress on the county's Hope Creek Care Center nursing home facility that currently relies on Tax Anticipation Warrants (TAWs) for cash flow purposes.
• Sylvania City School District, OH: Moody's downgraded this school district to A1 from Aa3. The A1 underlying rating reflects the district's ongoing structural imbalance which has led to dramatically reduced reserves since fiscal 2008. Also incorporated is the district's sizable, but depreciating tax base north of Toledo (A2 stable); above average socioeconomic characteristics; stable enrollment; uneven voter history; and above average debt burden with exposure to underfunded pension plans.