European stocks were mixed Tuesday following the previous day’s sell-off as overseas markets were open during the Labor Day holiday in the U.S.
Investors are worried the fiscal problems in Europe are worsening and infecting other markets. The Stoxx Europe 600 Index fell about 4% on Monday.
European banks took the brunt of the hit as the euro fell to $1.42, the lowest in one month, report Brian Blackstone and Laura Stevens for The Wall Street Journal. The high public debt and snail-like pace of economic growth seen in developed markets has investors jittery about the possibility of a double-dip recession.
“There is clearly a recognition that the debt crisis started in Europe, but the story is similar across the Western world,” said Silvio Peruzzo, economist at Royal Bank of Scotland. [European Regional ETFs Wither in Debt Turmoil]
Recent economic data points to a bleak picture for both developed markets, as the U.S. posted no job growth and economic risk is still strong. [Spain ETF in Focus After Bond Auction]