U.S. stock exchange traded funds reversed into negative territory Friday after Fitch downgraded Italy and Spain, which also sent euro-pegged ETFs lower.

Stock ETFs opened higher Friday after the September nonfarm payrolls report came in stronger than expected. [ETFs Rise After Jobs Report]

However, equities faded following headlines the two European countries saw their credit ratings cut.

“The downgrade reflects the intensification of the Euro zone crisis that constitutes a significant financial and economic shock which has weakened Italy’s sovereign risk profile,” Fitch said in a statement on its Italy move.

“As Fitch has cautioned previously, a credible and comprehensive solution to the crisis is politically and technically complex and will take time to put in place and to earn the trust of investors. In the meantime, the crisis has adversely impacted financial stability and growth prospects across the region,” the ratings agency added. “However, the high level of public debt and fiscal financing requirement along with the low rate of potential growth rendered Italy especially vulnerable to such an external shock.”

CurrencyShares Euro Trust (NYSEArca: FXE) was down 0.4% in afternoon trading as the Fitch news put Europe’s debt crisis back into focus after the U.S. jobs report. The ETF tracks the euro’s movements relative to the dollar.

CurrencyShares Euro Trust

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