The step could lead to a credit downgrade for Rupert Murdoch's troubled media empire, which has already lost $8 billion in market value since a phone hacking scandal began making worldwide headlines two weeks ago, the Los Angeles Times reported.
The News Corp. stock price was $14.97 a share at the close of trading Monday -- representing a 17 percent decline since July 5, the newspaper said.
In a statement, Standard & Poor's said it was concerned by "the increased business and reputation risks associated with broadening legal inquiries" into possible criminal activity by News Corp. journalists and executives, the statement said.
"In our opinion this and other recent developments materially increase the reputational, management, litigation and other risks currently faced by News Corp. and its subsidiaries," Standard & Poor's credit analyst Michael Altberg said in his company's release.
The statement also noted the company's executive structure has been weakened by a series of resignations.
A former News of the World reporter at the center of Britain's spreading phone-hacking scandal has been found dead, The Guardian reported Monday.
The collateral damage from the scandal also spread Monday to include a second top Scotland Yard official. John Yates, assistant commissioner of London's Metropolitan Police, quit one day after his boss, Paul Stephenson, resigned amid speculation about ties with Neil Wallis, arrested on suspicion of involvement in the scandal, The Guardian said.
The British newspaper reported it had learned Sean Hoare, the first named journalist to allege Andy Coulson was aware of phone hacking by his staff at the tabloid, was found dead at his Watford home. Hoare had worked at The Sun and News of the World with Coulson before being fired for alcohol and drug problems, The Guardian said.
Hertfordshire police would not confirm Hoare was the man found dead at the residence.
"The death is currently being treated as unexplained, but not thought to be suspicious," a police statement said. "Police investigations into this incident are ongoing."
Hoare had told The New York Times that not only did Coulson know of the phone hacking, but actively encouraged his staff to intercept the phone calls of celebrities in the pursuit of exclusives. He also told the BBC Coulson had personally asked him to tap phones and that the tabloid editor's denial was "a lie, it is simply a lie."
Yates resigned just after a disciplinary committee suspended him and a House of Commons panel summoned him to testify Tuesday on police links with widespread spying by the defunct News of the World tabloid.
Yates was criticized for deciding not to reopen the force's hacking inquiry after reviewing new evidence in 2009.
Parliament, which was to begin a six-week recess Tuesday, probably will be asked to extend its session to discuss the affair, Prime Minister David Cameron said.
Labor Party officials demanded an extra day so lawmakers could debate testimony given by News Corp. leader Rupert Murdoch and Stephenson, the BBC reported Monday.
Cameron said he would make a statement in the House of Commons Wednesday. Speaker John Bercow will decide whether to extend the session.
Murdoch, his son James and former News International Chief Executive Officer Rebekah Brooks are to appear Tuesday before the Commons culture committee to discuss what went on at the News of the World and what they knew about it. Brooks was an editor during the time the tabloid allegedly hacked into phones of public and private citizens.
Stephenson is to appear before the chamber's home affairs select committee Tuesday.
Among other things, the phone-hacking scandal has led to the arrests of at least nine people associated with the News of the World, including Brooks and another former editor, prompted Murdoch to withdraw his bid to take over British Sky Broadcasting, resulted in the resignation of Les Hinton, chief executive officer of Dow Jones, another News Corp. property, and led to the shuttering of News of the World. In addition, the FBI said it was investigating allegations News Corp. reporters tried to hack into voice mail accounts of victims of the Sept. 11, 2001, terrorist attacks on the United States.