Spain debt fears drive stocks lower, oil falls
By Blaise Robinson
PARIS (Reuters) - European stocks fell and Brent crude dropped below $125 on Tuesday, as concern that the euro zone remained vulnerable to Spain's financial struggles eclipsed recent enthusiasm following better U.S. and Chinese manufacturing data.
European stocks .FTEU3 dropped 0.5 percent, with the Spanish stock index IBEX .IBEX tumbling 1.4 percent, hit by worries over Madrid's ability to tackle its debt burden while its economy flounders.
The MSCI world equity index .MIWD00000PUS was down 0.1 percent at 1130 GMT, taking a breather after a two-day rally, and U.S. stock index futures pointed to a lower open on Wall Street. Futures for the S&P 500, Dow Jones and Nasdaq 100 were down 0.2-0.3 percent.
Spain's debt will jump to its highest level since at least 1990 this year as the economy sinks into recession and borrowing costs rise, a document detailing the country's 2012 budget showed, pushing Spanish 10-year bond yields up to 5.43 percent.
The number of registered Spanish jobless also rose for the eighth straight month in March as companies from all sectors continued to lay off staff.
Madrid's IBEX has lost 7.4 percent so far this year, strongly underperforming other euro zone markets such as Germany's DAX .GDAXI, up 20 percent year-to-date, and France's CAC 40 .FCHI, up 9.2 percent.