Fears about Europe's debt crisis, financial system pressure stocks; Dow loses 161, closes at 12,419

Cindy Allen

NEW YORK , May 30, 2012 (Associated Press) – Stocks are closing sharply lower amid fear that Europe's debt crisis might fracture the financial system there.

Strong demand for safe investments Wednesday pushed the yield on the 10-year Treasury note to its lowest level since World War II.

Spain's borrowing costs spiked to the highest level since Spain joined the euro currency. Last week, the nation's fourth-largest lender said it needed nearly $24 billion in government aid.

Greece's future in the euro is uncertain ahead of elections next month.

The Dow closed down 161 points at 12,419. The S&P 500 index was down 19 at 1,313. The Nasdaq composite average was down 34 at 2,837.

About 13 stocks fell for every two that rose on the New York Stock Exchange. Trading volume was heavy at 3.47 billion shares.

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