Global stocks retreated for a second straight day Wednesday over a disappointing Spanish debt auction and comments by the head of the euro zone's central bank that some Greek banks may collapse instead of being recapitalized.
Spain sold just €2.6 billion ($3.4 billion) of bonds, compared with a maximum target of €3.5 billion, and at yields that were well above previous auctions.
At a monthly conference held Wednesday, European Central Bank President Mario Draghi suggested that some Greek banks may lose their access to funding from the ECB during their recapitalization, raising renewed concerns about the outlook for Greece.
New data on business activity and retail sales in the euro zone confirmed earlier evidence that the region is in recession. A reading on U.S. private sector employment that was roughly in line with expectations failed to lift investors' sentiment, while a separate report showed service sector activities in March came in a touch below forecast.
Stocks.The benchmark S&P 500 index pulled back 14.45 points, to end at 1,398.93. SanDisk Corp. (Nasdaq: SNDK), the day's worst-performing stock, tanked more than 11 percent to close at $44.51 a share, after the company lowered its first-quarter outlook. The Dow Jones Industrial Average erased 124.88 points, to 13,074.67. The tech-heavy Nasdaq slid 45.48 points, to 3,068.09. European and Asian markets also finished in the red.
Bonds. Investors fled to safety, pushing the 10-year Treasury yields down to 1.8 percent. The yields on Spanish and Italian bonds surged, with the yield on the five-year Spanish bond rising to a 12-week high.
Currencies. The U.S. dollar rose against the euro but lost ground against the Japanese yen. The ICE dollar index climbed to 79.75, the highest in more than two weeks. The Chilean peso, the Indian rupee and the Brazilian real declined.
Commodities. Prices sank across the board. Crude futures tumbled 2.3 percent to their lowest in seven weeks after a weekly government data showed a steep supply increase. Gasoline and heating oil also fell on the news. Gold for June delivery fell 3.5 percent, a 12-week low, to settle at $1,614.10 an ounce, while silver plunged 6.7 percent. Grains futures mostly fell.