NEW YORK (AP) - fear Spain may need assistance to send their borrowing costs soared, the euro against the U.S. dollar and around the world tumbling investors way back to Monday risks from all stocks to two-year low.
The Dow Jones industrial average fell 239 points earlier in the day to close down at 12,721.46 101.11. The sinking of the U.S. government bond yields to record lows, traders sought the safety of U.S. Treasury bonds.
After borrowing costs rose sharply in Spain and Italy, there is news that the Spanish economy contracted by 0.4 percent in the second quarter. The decline in economic output of Spain to deal with their debt becomes more difficult.
Standard & Poor's 500 index fell 12.14 points to 1,350.52. The Nasdaq composite index fell 35.15 points to 2,890.15.
"Spain's borrowing costs increase health problems in Europe, Guy said:" Lebas at Janney Montgomery Scott, Philadelphia, chief fixed income strategist. "This is the flight of safe driving."
Sales generally. All 10 industry groups within the S & P 500, the material on and off more than 1 percent, health care companies. Including the decline in last Friday, the Dow fell 222 points, the maximum back back in less than a month of decline.
Except Spain, investors worried that Greece may get emergency loans, it needs to avoid default. Tuesday, arrived in the country from international creditors, inspectors, to check its progress in budget cuts and other conditions, it has agreed to exchange assistance.
The Greek government has repeatedly failed to hit the target of two has so far received the relief required.
Coupled with the tension, the Chinese central bank adviser forecast China's economic growth may slow down its second-quarter growth rate of 7.6%, which is already the slowest in three years.
Investors had hoped that the slowdown in the U.S. and Europe, the world's second largest economy, will make up, but now not so sure.
"I think it is still a weekend," Lawrence said in a portfolio manager at Federated Investors in mutual fund company Creatura. "People initially worried about Europe, but now it spread to China and beyond."
In Spain, the 10-year benchmark yield of government bonds rose to 7.43 percent, the highest since the start of 1999, the euro and the level is not sustainable to consider more than a few months. Other transactions recorded in fear. The Spanish government debt investors to take the insurance costs soared to record high (Monday).
The message: Bank of Spain had from international creditor to seek funding to maintain operations, the Government of Spain may need help.
Save the Real Madrid prospect is worrying Europe, because the potential costs far exceed the available contingency funds.
Weekend fear ratcheted up in the southern region of Spain announced that it may need a financial lifeline from Madrid to make ends meet. Followed by news last week, east of the country for help.
Review the global financial crisis four years ago, a move last Monday, the Spanish market regulator said, this is a temporary ban on stock short selling stock index. Investors sold in the short term, aims to profit by betting a stock's price will decline.
The United States briefly banned in 2008, dozens of stock short selling as prices fell.
The strong sales rattled the European market. The major indexes fell more than 7%, Spain, Greece, 1% 3% in Germany and France. Asian stock markets sharply lower.
Bank shares, often take a hit, fear flares Europe One of the biggest losers. Citigroup shares fell 53 cents, or 2 percent, to $ 25.34.
The oil prices fell $ 3.69, or 4 percent, the day to close at $ 88.14 a barrel in New York. Exxon Mobil's stock fell 74 cents, or nearly 1 percent, to $ 85.21.
Euro against the U.S. dollar fell from just under $ 1.21, June 2010, the lowest.
There are indications that the global economic slowdown hit riding the recovery of anemia, as well as more overseas sales of U.S. companies. Now, they can not be like as fast as sales growth, and they do what sell decline in value of foreign currencies against the U.S. dollar weakened. This is converted into dollars, because U.S. companies must report to investors of foreign currency income and foreign currency weak to take fewer dollars.
Although the sales in the world of McDonald's restaurants open at least a year rose 3.7%, for example, the profit due to currency exchange rate fell by about the same speed. McDonald's revenues generated outside the United States about two-thirds
"A disproportionately large number of overseas income is negative today, said:" Creatura Federated Investors. "Weakens the list of overseas markets every day longer."
In the world's largest hamburger chain fell $ 2.64, or 2.9 percent, to $ 88.94 after the majority of Wall Street Street net income and revenue expected to fall.
Hasbro also hurt currency transactions. If not the dollar surge in the international second-quarter revenue will increase rather than decrease of 4%, 5%, the toy maker said on Monday. Still, the company beat analysts estimated net income, thanks in part cost reduction.
Hasbro and its products, including Monopoly and Scrabble, shares rose $ 1.35, or 4 percent, to $ 35.19.
In other stock news:
- RailAmerica, short-term line railway operator, rose $ 2.44, or nearly 10 percent after the company announced that it plans to sell $ 139 million in cash and other short-term operator Genesee and Wyoming, $ 27.25.
- Halliburton, the oil and gas services company, flat second-quarter earnings rose 2.4 percent. Recent oil drilling company sold around the world benefit.
- Pete coffee and tea, rose 28 percent announced the sale to a privately held consumer products company in Germany about A clean, $ 73.05.



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