Global stocks were steeply lower on Monday and the euro fell to its lowest level in two years as concerns about Spain’s financing problems plagued markets anew.
Following on the heels of Europe and Asia, the sell-off caught fire on Wall Street in early trading. By midday, the losses had moderated, with the Dow Jones industrial average down 1.1 percent, or 138 points, and the broader Standard & Poor’s 500 was down 1.3 percent. The Nasdaq fell 1.8 percent.
The trend in the United States was set in global markets after Spain’s borrowing costs soared to record levels, with the yield on the 10-year Spanish government bonds hitting as high as 7.5 percent. At that level, many analysts fear Spain could eventually be shut out of public markets and forced to seek a Greek-style bailout.
In another sign of the market worries, Spain’s stock market regulator banned short-selling of all stocks for three months, citing “extreme volatility.” Italy enacted a similar but shorter ban.