U.S. markets slump on eurozone anxiety
Specialists Michael McDonnell, left, and Christian Sanfilippo work on the floor of the New York Stock Exchange Tuesday. Stocks are opening higher on Wall street on optimism that China will take action to reverse a slowdown in its economic growth. (May 29, 2012) Credit: AP
Fearing a financial rupture in Europe, investors around the world fled from risk Wednesday. They punished stocks and flocked to bonds, driving the yield on the benchmark 10-year U.S. Treasury note to its lowest point since World War II.
In the United States, where concerns about Europe have already wiped out most of the strong gains that stocks had in the first quarter, major averages fell more than 1 percent. The Dow Jones industrial average closed down 160.83 points.
Spain's banking system is teetering, and Greece's political future is unclear ahead of crucial elections next month.
"Everyone's just afraid that if Europe doesn't get its act together, there will be a big spillover in the U.S.," said Peter Tchir, manager of the hedge fund TF Market Advisors.
He said the uncertainty in Europe was reminiscent of the financial crisis in the fall of 2008, when it was briefly unclear in the United States whether banks would be bailed out and "we had these giant swings up and down." Wall Street, which woke up to increased anxiety over higher Spanish borrowing rates, was down from the opening bell.
The Dow closed down 160.83 points to 12,419.86.The Standard & Poor's 500 index fell to 1,313.32. The Nasdaq composite index fell to 2,837.36.
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