Stocks plummet as outlook in Europe dims

Specialists Michael McDonnell, left, and Christian Sanfilippo work on the floor of the New York Stock Exchange Tuesday, May 29, 2012. Stocks are opening higher on Wall street on optimism that China will take action to reverse a slowdown in its economic growth. (AP Photo/Richard Drew)

U.S. stocks and other risky investments are plunging as fear intensifies about a rupture in Europe's financial system.

The European Commission said early Wednesday that confidence across that continent fell sharply this month. People are withdrawing cash from Spanish banks. Spain's 10-year borrowing rate spiked to the highest since it joined the euro.

Strong demand for safe, easily traded investments pushed the yield on the benchmark 10-year Treasury note to a record low of 1.63 percent from 1.74 percent late Tuesday.

The Dow is down 155 at 12,425 shortly before noon Eastern time. The S&P 500 is down 18 at 1,314. The Nasdaq composite index is down 36 at 2,834.

Heavy equipment maker Caterpillar and aluminum maker Alcoa sank as traders anticipated that the global economy would weaken.