NEW YORK — A spike in borrowing costs for the Spanish government renewed worries about Europe’s debt crisis and pushed stocks lower Thursday for the second day in a row.
A stalemate in Congress over cutting the budget deficit also pulled the market down. Technology stocks sank after Net App and Applied Materials predicted weaker earnings.
In Spain, an auction of 10-year bonds left the country paying interest rates of nearly 7 percent, the highest rate since 1997. Economists see that level as unsustainable because it would make the interest payments on Spain’s debt so high that the government would barely be able to afford them.
Concerns about Europe’s debt crisis overshadowed better economic reports in the U.S. The number of people seeking unemployment benefits last week fell to the lowest level in seven months, a sign that 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 Dow Jones industrial average dropped 134.86 points, or 1.1 percent, to close at 11,770.73.
The Standard & Poor’s 500 index lost 20.78, or 1.7 percent, to 1,216.13. The index fell below its average over the past 100 days. That’s a bearish signal because many traders wait until indexes fall below such technical levels before deciding to unload their positions.
Technology stocks fell more than the rest of the market. The Nasdaq slid 51.62, or 2 percent, to 2,587.99. All three major indexes are down more than 3 percent for the week.
