Stocks Plunge Near 400 pts on European Debt Crisis

Worries that the growing European debt crisis would drag down the global economy slammed Wall Street Wednesday, pushing the Dow Jones industrial average down about 3 percent at the close.

The broader market was harder hit. The S&P 500 and Nasdaq ended down almost 4 percent. The market’s fear gauge, the CBOE Volatility Index, hit a high of 36 during the session. At one point during the session, the Dow was off more than 400 points.

Financial stocks led what was a global rout. Shares of Morgan Stanley, Bank of America, Goldman Sachs, Wells Fargo and Citigroup all tumbled on worries about bank exposure to Europe.

U.S. stocks had been under selling pressure from the first clang of the opening bell after Italy's borrowing costs soared to 7.502 percent, a level that many feel is unsustainable. Investors pushed Italian rates higher because they wanted more than just Italian Prime Minister Sylvio Berlusconi’s promise he would step down when the Italian parliament passes a package of austerity measures.

Read the rest here.