Bloomberg Stocks, Euro Plunge as Treasuries Gain on Greece, Portugal Debt

April 27 (Bloomberg) -- Stocks tumbled, with the Standard & Poor’s 500 Index falling the most since February, and the dollar and Treasuries rose as credit-rating downgrades of Greece and Portugal fueled concern debt-laden nations are moving closer to default. Greek, Portuguese and Irish bonds sank.

The S&P 500 lost 2.3 percent at 4 p.m. in New York. The Stoxx Europe 600 Index slid 3.1 percent, the most since November, and the euro dropped below $1.32 for the first time since April 2009. Yields on 10-year Treasuries tumbled 12 basis points to 3.68 percent. Greek two-year note yields jumped to a record of almost 19 percent and Portugal’s jumped to 5.7 percent as credit-default swaps on Europe debt surged to the highest ever. Oil sank 2.1 percent, while gold rallied 0.7 percent.

S&P lowered Greek debt to junk and Portugal was cut two steps as contagion from Greece’s debt crisis spreads through the euro region. The downgrades come as German officials insist Greece must outline further steps to cut its budget deficit before they will endorse the release of funds from a 45 billion euro ($60 billion) rescue package. Financial shares led U.S. stocks lower as the Senate’s interrogation of Goldman Sachs Group Inc. executives spurred concern of tighter regulation. more...