By BERNARD CONDON
AP Business Writer
NEW YORK (AP) - Fear that Spain may need a government bailout is sending stocks around the world sharply lower. The Dow Jones industrial average is down 155 points to 12,668.
Yields for U.S. government bonds sank to record lows as traders sought the safety of American debt. The euro hit a two-year low against the U.S. dollar.
Borrowing costs rose sharply for Spain and Italy after news the Spanish economy contracted by a quarterly rate of 0.4 percent in the second quarter. Falling economic output makes it more difficult for Spain to deal with its debts.
The Standard & Poor's 500 index fell 20 points to 1,343, and the Nasdaq composite index plunged 56 points to 2,869.
The Dow has had only seven declines of 150 points or more so far this year.
