Stocks, Treasury yields fall on Europe fears
Global stock markets sagged and Treasury yields fell to fresh lows as investors fretted about the latest development in the European debt crisis.
Rising interest rates in Spain triggered concerns that the country may require a government bailout. And that came on top of heightened investor worries about the damage a slowing U.S. economy could inflict on corporate earnings.
“There’s more risk than reward in the stock market at this point,” said Gary Flam, portfolio manager at Bel Air Investment Advisors.
The Dow Jones industrial average fell 101.11 points, or 0.8%, to 12,721.46. It sank more than 239 points early in the morning before staging a partial rebound.
The Standard & Poor’s 500 index slipped 12.14 points, or 0.9%, to 1,350.52. The Nasdaq composite dropped 35.15 points, or 1.2%, to 2,890.15.
The yield on the 10-year Treasury note slid to another all-time low, finishing at 1.43% after declining to 1.40% earlier in the day.
Meanwhile, the yield on Spain’s 10-year bond rose to 7.50%. At that level, experts say, the country may not be able to afford to borrow the money needed to finance its operations.
Spain has a far larger economy than its troubled neighbor Greece, and investors worry that its problems could spread to additional countries.
“It’s much more important than Greece ever was,” said Alan Gayle, chief investment officer at RidgeWorth Capital Management.
