Wall Street Freaks Over Portuguese Bank's Crisis

Banco Espirito Santo missis payment to creditors
By Kevin Spak,  Newser Staff
Posted Jul 10, 2014 9:06 AM CDT
Wall Street Freaks Over Portuguese Bank's Crisis
A broker watches a screen displaying information about turmoil in the Portuguese stock market and the sharp fall in Banco Espirito Santo shares, in a trading room of a bank in Lisbon, July 10, 2014.   (AP Photo/Francisco Seco)

The Dow plunged 153 points at the open this morning, reports the Wall Street Journal, as investors cast a worried eye toward Portugal and its second-largest lender. Banco Espirito Santo's shares plunged more than 17% before trading was halted on them, after its parent company revealed that it had missed short-term debt payments, Bloomberg reports. Portugal's central bank rushed to reassure investors that the bank is protected, but analysts are worried that this could signal a revival of Europe's debt crisis.

"Should the Portuguese situation continue to deteriorate, risk aversion contagion could quickly spread" throughout Europe, one New York securities strategist told clients. "The situation confirms the EU’s efforts to break the link between sovereigns and the related banking system has not been successful." (More Portugal stories.)

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