When the NYSE Euronext plunged 140 points — or 1.5% — on Monday, many pundits were quick to point to what they believed was the reason: Standard & Poor’s (S&P) changed its view of America’s long-term credit prospects from “stable” to “negative.” The “negative” outlook means that S&P now sees a one-in-three “likelihood” that it could lower its triple A long-term credit rating for the U.S. sometime over the next two years. The U.S. has carried that triple A rating since S&P first rated U.S. debt 70 years ago.

While media reports suggested that investors seemed divided on whether the S&P announcement reflects any real change in U.S. creditworthiness, something curious was happening in markets outside of NYSE Euronext.

For one thing, demand for the very bonds being trashed by S&P were at the same moment being bought up by investors, so much so that on Monday the price for 10-year Treasuries rose by one 1%. That is exactly the opposite of what would be expected if the S&P announcement were taken to heart. What’s more, the dollar rose on Monday against the Euro, also the opposite market reaction one would expect if the creditworthiness of the U.S. had crossed some critical juncture. Meanwhile, the other two main rating agencies, Moody’s and Fitch, have not followed S&Ps lead, at least so far.

So, what was going on?

“I think the bond markets have already discounted the issue,” says Mauro Guillen, a Wharton management professor and director of the Lauder Institute. “The equity markets should have also, but they are behaving in crazy ways recently.”

Another explanation for what caused the stock market to plunge “is that bad earnings reports, most importantly from Bank of America on Friday and from Citigroup on Monday, made investors more pessimistic about the near-term prospect for profits,” Dean Baker, co-director of the Center for Economic and Policy Research, wrote in his blog on Monday.

By way of further perspective, Baker added, “It is also worth noting that S&P has a horrible track record for judging creditworthiness. It rated hundreds of billions of dollars of subprime backed securities as investment grade. It also gave Lehman, Bear Stearns, and Enron top ratings right up until their collapse.”

Many observers seemed to view S&P’s announcement simply as a way to apply political pressure on the federal government to take action on the debt. And Martin Wolf, in his Financial Times column today, wrote: “It is astonishing that Standard & Poor’s can say anything about the best-known debt class in the world that is deemed to add value. This business is, after all, of a class whose failures contributed mightily to the financial crisis.”

Still, as Wolf points out, the S&P announcement has the virtue of reminding us “of something vital: The world economy is not on a stable path.”

And as for the U.S. position, Guillen says we should not minimize the serious challenge. “The U.S. has both a large budget deficit and a large current account deficit. The former raises doubts about the long-term sustainability of U.S. tax revenue and spending streams, and casts a doubt on the dollar as the world’s reserve currency. The latter also puts downward pressure on the dollar.”

In Guillen’s view, it is just a matter of time, “unfortunately, before the U.S. loses its pre-eminent place in global economic and financial affairs unless we act now to correct the imbalances, become more productive, save more, innovate and get smart about our own finances. We must take action now to correct these negative trends.”