Greek crisis fears deepen

By Aaron Smith, staff writer

NEW YORK ( -- The yield on Greek bonds soared to record levels again, a day after Standard & Poor's slashed its debt rating on the country to junk and amid reports that the IMF is considering more loans to the beleaguered country.

The yield on 10-year Greek bonds surged to 11.24% early Wednesday from 9.68% on Tuesday. The yield is the highest for the 10-year since the introduction of the euro in 2002.

The jump in the yield on the Greek bond has led to an enormous spread, of 8.22 percentage points, compared with German bond yields. The yield on the German 10-year bond, considered the European benchmark, slipped to 3.02% early Wednesday.

"The catalyst for this has been continued uncertainty regarding the conditions of the Greek bailout, and the shifting of focus towards the longer term sustainability of the Euro area as a whole," said Martin Harvey, European bond analyst for Threadneedle in London.

Harvey said that the most "worrying development" is the "contagion" of Greek bond weakness into other markets.

The turmoil was felt across the Atlantic, as investors bailed out of U.S. stocks. The Dow Jones industrial average plummeted 213 points, or 1.9%, on Tuesday.

Concerns about Greece have been plaguing international markets for months. Investors are worried that if Greece defaults on its loans, the repercussions could have a ripple effect on other countries and kill the chances for a global recovery.

The chief catalyst behind the market turmoil came from Tuesday's decision by S&P to slash the Greek bond rating to "BB+" with a negative outlook, knocking it down to junk status. This was its second rating cut in as many weeks.

An unnamed Greek official said Wednesday that the International Monetary Fund might provide his country with an additional loan of up to about $13 billion, according to news reports. This is in addition to its promised loan of nearly $20 billion.

In addition, the European Union has pledged nearly $40 billion at a 5% rate. The impetus for the loan was to help the Greek government redeem bonds that mature on May 19.

Also on Tuesday, S&P cut its rating on Portugal by two notches to "A-," raising worries that the crisis would spread to the so-called PIIGS. In addition to Greece, they include Portugal, Ireland, Italy and Spain. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.30%4.34%
15 yr fixed3.72%3.76%
5/1 ARM4.08%4.26%
30 yr refi4.28%4.31%
15 yr refi3.69%3.73%
Rate data provided
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 24,946.51 72.85 0.29%
Nasdaq 7,481.99 0.25 0.00%
S&P 500 2,752.01 4.68 0.17%
Treasuries 2.85 0.02 0.78%
Data as of 12:40am ET
Company Price Change % Change
Chesapeake Energy Co... 3.06 0.04 1.32%
General Electric Co 14.31 -0.05 -0.35%
Bank of America Corp... 32.17 0.07 0.22%
Ford Motor Co 11.15 0.08 0.72%
Micron Technology In... 60.58 1.74 2.96%
Data as of Mar 16


The European Union has published a long list of American products that it could target if President Donald Trump moves forward with new tariffs on steel and aluminum. More

"It's like competing in an Olympic race wearing lead shoes," Elon Musk, referring to trade rules with China, tweeted to President Donald Trump. More

Good news for procrastinators: You get two extra days to file your federal income taxes. April 15 falls on a weekend and April 16 is a public holiday in the District of Columbia. More