Dow drops nearly 125 on Spain debt sale

European debt flared again as a worry for Wall Street and drove stocks Wednesday to their worst loss in a month. The Dow Jones industrial average lost nearly 125 points, and the price of gold plunged to its lowest level since January.

It was only the second time this year the Dow has recorded a triple-digit decline. The average gained 8 percent from January through March, its best first quarter since 1998, but has lost 1 percent already in April.

The Dow was down as much as 179 points but recovered to close down 124.80 at 13,074.75.

A disappointing auction of government debt in Spain signaled that investor confidence in that country's finances is weakening. Spain announced tax increases and budget cuts last week, which could hurt its economy further. Bond yields in Spain shot higher, making it more expensive for the country to raise money. Spain is following Greece as the flash point in Europe's debt crisis.

"It's like when cockroaches appear: You're never quite sure how many are out there," said John Manley, chief equity strategist for Wells Fargo Advantage Funds. The Standard & Poor's 500 index fell 14.42 to 1,398.96. The Nasdaq composite index fell 45.48 to 3,068.09.