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Market Recap: Continuing Euro Crisis Drives Markets Down

Market Recap: Continuing Euro Crisis Drives Markets Down

Markets closed down today:

▼ Dow: -0.62 percent

▼ Nasdaq: -0.86 percent

▼ S&P: -0.70 percent

Precious metals:

▲ Gold: up +0.42 percent to $1,609.45 an ounce

▼ Silver: up -0.39 percent to settle at $28.90

Commodities:

▼ Oil: -1.00 percent

Markets were up because:

U.S stocks skidded Wednesday, a looming election in Greece and the broader debt maelstrom in Europe their ominous backdrop.

Major market indexes wavered for much of the day but fell sharply after the finance minister of Cyprus warned that his country may seek its own bailout this week, stoking the uneasy feeling that the crisis is far from over.

In a troubling sign, Spain's 10-year borrowing rate inched up to 6.71 percent from 6.67 percent. Other countries in Europe have had to seek bailouts when their borrowing rates hit 7 percent.

European leaders said over the weekend that they will lend up to $125 billion to Spain's banks, but that has not soothed markets. Investors want more details about the plan, including where the money would come from and how likely it is that Spain would pay it back.

Moody's, the credit ratings agency, downgraded Spain's government debt three notches late Wednesday, placing it one level above junk status. It downgraded Cyprus's debt by two, pushing it deeper into junk rating.

Italy - which, like Cyprus, could be the next flashpoint in the debt crisis - had setbacks of its own. Its 10-year borrowing rate rose to 6.07 percent from 6.02 percent, and the interest rate on its one-year bonds also rose sharply.

Greece will hold elections Sunday, and voters may endorse a party that wants to cancel the terms of Greece's own bailout. That would almost certainly force Greece to leave the euro currency.

The Dow Jones industrial average shed 77.42 points to end at 12,496.38 after another day of volatile trading. The Dow had been down as much as 120 points and up as much as 24 points. That followed a triple-digit gain on Tuesday and a triple-digit loss on Monday.

The Standard & Poor's 500 index fell 9.30 points to 1,314.88, and the Nasdaq composite index fell 24.46 points to 2,818.61.

The interest rate on the U.S. 10-year Treasury note fell to 1.60 from 1.66 percent. Investors moved money into one of the few places where they think it will be safe, with the U.S. government.

Big movers included JPMorgan Chase, which rose 53 cents to $34.30 after CEO Jamie Dimon testified to Congress about the bank's surprise $2 billion trading loss. Dell jumped 30 cents to $12.28 after the computer maker said it would begin paying its first shareholder dividend. Cigarette maker Philip Morris International rose 69 cents to $85.70 after announcing it would buy back more of its own stock.

The Associated Press contributed to this report.

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