Stocks sink; Spain becomes latest worry in Europe

NEW YORK (AP) ? Stock indexes fell in afternoon trading Thursday as spiking bond yields in Spain brought new worries Europe’s debt crisis and overshadowed the latest signs of growth in the U.S. economy.

Technology stocks led the market lower after two companies disappointed investors with weaker earnings predictions. NetApp Inc. plunged 12 percent, the most in the S&P 500 index, after the data storage company forecast earnings that were below Wall Street’s estimates.

Applied Materials Inc. also said its earnings for the current quarter would be weaker than analysts’ forecasts. The company’s income fell 3 percent last quarter on lower demand fell for the semiconductor equipment it makes.

The Dow Jones industrial average dropped 159 points to 11,746 as of 1 p.m. Eastern time. It had wavered between gains and losses earlier in the day. Cisco Systems Inc. had the largest fall of the 30 stocks in the Dow, 2.7 percent. Intel Corp. dropped 2.4 percent.

In Spain, an auction of 10-year government bonds left the country paying interest rates of nearly 7 percent. That’s the highest rate since 1997 and a level that economists see as unsustainable. Greece and Ireland received rescue loans from the European Union after their bond yields jumped above the same level.

Spain has much more debt than either Greece or Ireland, which would make it difficult for other countries to rescue. Like Italy, whose main borrowing rate also spiked above 7 percent in the last week, the country is burdened with high debts and slow growth.

Concerns about Europe’s debt crisis contrasted with better economic reports in the U.S. The number of people seeking unemployment benefits last week fell to the lowest level in 7 months, a sign layoffs are easing.

“The economic data in the U.S. has been improving,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Conn. “If it weren’t for Europe, I think equity markets would be doing much better right now.”

The Spanish bond auction came a day after Fitch Ratings warned that major U.S. banks could be “greatly affected” if Europe’s debt crisis continues to spread beyond the financially troubled Greece, Ireland, Portugal, Italy and Spain.

Building permits jumped 10.9 percent, much higher than economists expected. That’s another sign that the U.S. may not be headed for another recession.

The Standard & Poor’s 500 index lost 21, or 1.8 percent, to 1,214. The Nasdaq composite slid 57, or 2.1 percent, to 2,582.

In corporate news:

? Consumer review site Angie’s List soared 21 percent on the company’s first day of trading. Angie’s List Inc., which runs reviews of veterinarians, plumbers and other local services, priced its initial public offering of 8.8 million shares at $13 late Wednesday.

? Sears Holdings Corp. fell 4.6 percent after its third-quarter results missed Wall Street’s expectations. The retailer’s sales were dragged down by declining consumer electronics sales and softer sales at its Kmart stores.

? J.M. Smucker Co. lost 2.4 percent after reporting that rising costs for ingredients were cutting into profits.

? Boeing Co. slipped 1 percent after the market turned lower in the afternoon. The company had traded higher after announcing its largest commercial airplane order. Lion Air, a private carrier in Indonesia, ordered a total of 230 airplanes at a list price of $21.7 billion.