NEW YORK: US equity markets tanked Wednesday as a poor German government debt auction fueled fears over Europe's fiscal crisis and weak growth in the eurozone, a major US trading partner.
Markets spent the day stuck in negative territory after Germany was able to sell only part of an issue of German 10-year bonds, considered the gold standard of eurozone debt.
"The European debt crisis escalated after a failed German government-bond auction indicated that investors are now demanding higher risk compensation even at the heart of the currency bloc's debt market," said Robert Brusca, chief economist at FAO Economics.
The Dow Jones Industrial Average tumbled 232.08 points (2.02 percent) to 11,261.64 in closing trade.
The broader S&P 500-stock index dropped 25.89 points (2.18 percent) to 1,162.15, while the tech-rich Nasdaq slid 60.86 points (2.41 percent) to 2,460.42.
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