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Spain credit downgrade caused world equities slide and worries about european debt crisis.

An investor talks on his mobile phone while standing in front of an electronic board displaying stock prices at the Karachi Stock Exchange May 25, 2010.

World equities slid and the euro fell on Friday after a downgrade of Spain’s credit rating sent a new chill through markets already worried about the European debt crisis.

The downgrade by Fitch Ratings ignited a new round of selling in equities that were already lower after lackluster U.S. economic data injected a note of caution ahead of long holiday weekends in both the United States and the UK.

Fitch downgraded Spain’s credit rating to AA-plus, and said it expects the country’s adjustment to a lower debt level will materially reduce its rate of economic growth over the medium-term.

Fitch cited an inflexible labor market and a restructuring of regional and local savings banks as hindrances to the pace of adjustment.

“This should exacerbate the tremendous volatility we’ve seen in global stocks as the world wrestles with the idea of a debt-based collapse,” said Chip Hanlon, president of Delta Global Advisors in Huntington Beach, California.

“Adding to this is the fact that…READ MORE HERE.