Europe: Ticking Debt Bomb?

[Professor S]

http://money.cnn.com/2010/05/06/mark...dex.htm?hpt=T1

Stocks selloff sharply Thursday, extending the recent downturn as investors continued to worry that Europe's debt problems will slow a bigger global economic recovery.

The Dow Jones industrial average (INDU) lost as much as 997 points in volatile trading. At 2:50 p.m it was down 600 points, or 5%. The S&P 500 index (SPX) slipped 63 points, or 5.4%. The Nasdaq composite (COMP) dropped 127 points, or 5.3%.

Stocks have been sliding on and off for the last two weeks as investors mull the ramifications of the growing debt crisis in Europe. While European leaders have pledged to provide Greece with $146 billion in loans over the next three years, attempts by the nation to institute certain "austerity" measures to bring down the deficit have sparked riots and other violent outbursts.

Meanwhile, investors are concerned that the size of the bailout will make Europe less able to help Spain, Portugal and other debt-plagued nations. The so-called PIIGS also include Italy and Ireland.

Man, this is not good.