Stocks Opened Sharply Lower on Spanish Woes

U.S. stocks opened sharply lower on Wednesday as investors worried about Spain’s banking problems. The Dow Jones Industrial Average lately fell 127.53 points, or 1.01%, to 12,453.16. The S&P 500 shed 14.53 points, or 1.09%, to 1,317.89. The Nasdaq Composite declined 34.58 points, or 1.20%, to 2,836.41.

Spain’s borrowing costs lurched higher and the Madrid stock market hit a nine-year low on Wednesday as investors rattled by deepening fears about its banking system fled to the relative haven of German bonds.

Shares of Pep Boys Manny, Moe & Jack (NYS:PBY) fell almost 25 percent after private equity firm Gores Group walked away from a $791 million deal to buy the auto parts retailer. Gores had offered $15 per share for Pep Boys in January, but earlier this month sought to delay the shareholder meeting scheduled to vote on the deal citing serious deterioration in Pep Boys’ business.

Economic confidence across Europe fell sharply in May, the European Union’s executive branch said Wednesday. The European Commission said its economic sentiment indicator for the 17 countries that use the euro fell by 2.3 points in May to 90.6 — its lowest level in around two and a half years.