From The Guardian UK: http://www.guardian.co.uk/business/2011/aug/02/debt-crisis-turmoil-italy-spain
Markets spooked as bond yields in both founder members of single currency hit monetary union records
Financial markets in Europe and North America were gripped by a new sense of crisis as the turmoil caused by the narrowly averted US debt default moved back across the Atlantic and infected Italy and Spain – two key members of the eurozone.
Bond yields in both the founder members of the single currency hit monetary union records, forcing Spain's prime minister, José Luis Rodríguez Zapatero, to abandon his holiday plans. Italy responded to a fresh wave of losses in its banking sector by announcing a crisis meeting of economic policymakers.
Interest rates on Spanish and Italian bonds rose to well above 6%, the level that signalled the beginning of the bailout process for Greece, Ireland and Portugal.
Meanwhile, interest rates on assets seen as safer fell sharply, with the yield on UK 10-year gilts dropping to an all-time low of 2.77%. Gold rose to a new record level for a ninth day in a row on Tuesday.
Wall Street's Dow Jones index had lost 266 points by the close in New York – its eighth successive fall and longest losing streak since the global banking system was on the brink of collapse in October 2008.
US shares have given up virtually all their 2011 gains, while stocks in Europe and Asia are already trading below the levels at which they ended 2010.
Continue reading at: http://www.guardian.co.uk/business/2011/aug/02/debt-crisis-turmoil-italy-spain