Market Recap: Worst Loss for the Dow This Year

Markets closed down today:

▼ Dow: -1.65 percent
▼ Nasdaq: -1.83 percent
▼ S&P: -1.71 percent

Precious metals:

▲ Gold: (NYSE:GLD) up +1.09 percent to $1,659.07 an ounce
▲ Silver: (NYSE:SLV) up +0.65 percent to settle at $31.72

Commodities:

▼ Oil: -1.18 percent

Markets closed down because:

The stock market extended its longest and deepest slump of the year Tuesday, caught between a recurring nightmare of European debt and the beginning of uncertain corporate earnings reports at home.

The Dow Jones industrial average fell 213.66 points, its biggest decline of the year and third triple-digit loss in four days. It closed at 12,715.93, its lowest since Feb. 2.

A five-day losing streak has shaved about 550 points off the Dow, about half what it gained from January through March.

In Europe, concern about the financial health of Spain intensified, and borrowing costs for both Spain and Italy rose considerably. Spain’s borrowing costs crept closer to levels that forced other countries to seek bailouts.

European markets sold off while Wall Street was still sleeping. The main stock indexes in Spain and France closed down about 3 percent, the equivalent of a 400-point drop in the Dow.

“They’ve managed to put a Band-Aid on the debt crisis, but there’s really no solution,” said Colleen Supran, a principal at the investment adviser Bingham, Osborn & Scarborough. “And Spain is a much bigger problem than Greece.”

Jeffrey Cleveland, senior economist at Payden & Rygel in Los Angeles, compared the financial markets to a person coming off a sugar high – in this case, the bailout package for Greece put together late last year.

“It works for a few minutes, but eventually reality reasserts itself,” Cleveland said. “Nothing has been solved in Europe. People are paying attention to it now. They were able to ignore it for a little while.”

The Associated Press contributed to this report.