A downgrade of Spain's debt rating rekindled investors' broader fears about European credit sparking a sharp decline in stocks in the last session of May, the biggest monthly drop since February 2009 and the worst percentage decline for May since 1940.
Trading was especially volatile in the afternoon after Fitch Ratings lowered its rating on Spain's debt to AA+ from AAA, but said the country's outlook is stable. The downgrade came despite this week's passage of austerity measures by the Spanish government—a move that bulls had hoped would help the country avoid struggles similar to those of Greece.
The Dow Jones Industrial Average fell 122.36 points, or 1.2%, to 10136.63, led by declines of more than 2.5% each in 3M, Bank of America, and Walt Disney.
Industrials weakened as fresh euro-zone concerns reignited worries that global demand may wane. Boeing fell 1.5%, while Caterpillar was off 2.1%.
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