New York – The Dow plunged more than 200 points, or 2 percent, Tuesday as the dollar rallied against the euro amid worries about the European debt crisis.
The market was buzzing with a fresh round of speculation that Spain might be next to need a bailout.
Prime Minister Jose Luis Rodriguez Zapatero shot back that such speculation was “complete madness.” Zapatero said any speculation about the euro zone outside of Greece was “totally unfounded and irresponsible.”
Stocks seesawed in the last week as Europe’s efforts to agree on a bailout package for Greece proceeded in fits and starts. An agreement of $144 billion from the EU and IMF came together on Sunday, but its size worried investors that Europe would have a tougher time assembling an aid package if any other country were to get in trouble.
Adding to the worries, investor Marc Faber told Bloomberg that China’s economy could “crash” in the next year as the nation’s property bubble is about to burst. “The market is telling you that something is not quite right,” Faber told the news service.
This echoed comments investor Jim Chanos made in an interview with Charlie Rose last month, where he said China is “on a treadmill to hell” and “can’t afford to get off this heroin of property development.”