Stocks plunged Tuesday as credit-rating downgrades of Greece and Portugal spurred concern that Europe’s debt crisis will thwart the global economic recovery.
The Dow Jones industrial average closed down 213.04, or 1.9%, at 10,991.99; the S&P 500 fell 28.34, or 2.34%, ending at 1,183.71; and the Nasdaq composite closed down 51.48, or 2.04%, at 2,471.47. All numbers are preliminary.
Alcoa and Caterpillar led declines among all but two of the 30 companies in the Dow average as the perceived risk of default increased for government debt issues by Greece, whose rating was cut to junk, and Portugal. Ford Motor Co. fell 4.7% from a five-year high as an analyst said first-quarter results were “unsustainable.”
Goldman Sachs Group had one of two gains among the 79 financial companies in the S&P 500 as executives testified before a Senate subcommittee.
Greece was lowered to BB+ from BBB+ by S&P, which also warned that bondholders could recover as little as 30% of their initial investment if the country restructures its debt. The Greek move came minutes after the rating company reduced Portugal by two steps to A- from A+.