NEW YORK (AP) - A spike in borrowing costs for the Spanish government renewed worries about Europe's debt crisis and pushed stocks lower for the second day in a row.
A stalemate in Congress over cutting the budget deficit also pulled the market down Thursday. Technology stocks sank after NetApp and Applied Materials predicted weaker earnings.
In Spain, an auction of 10-year bonds left the country paying interest rates of nearly 7 percent, the highest rate since 1997. Economists see that level as unsustainable because it would make the interest payments on Spain's debt so high that the government would barely be able to afford them. Greece and Ireland were forced to seek rescue loans from the European Union after their bond yields jumped above the same level.
The Dow Jones industrial average dropped 134.86 points, or 1.1 percent, to close at 11,770.73. The index wavered most of the morning, then turned sharply lower shortly after noon. It fell as many as 229 points at 2:30 p.m.
Spain has more than twice the amount of debt as Greece and Ireland combined, which would make it difficult for other countries to rescue. Like Italy, whose main borrowing rate also spiked above 7 percent in the last week, the country is trying to pay down its debts as its economy slows.
The Standard & Poor's 500 index lost 20.75, or 1.7 percent, to 1,216.16.