NEW YORK — Stocks fell Thursday as worries about the soundness of a European bank spooked U.S. investors, prompting them to sell off stocks and snap up less risky assets like gold and governments bonds. However, the declines were half of what they were earlier in the session.
KEEPING SCORE: The Dow Jones industrial average was down 73 points, or 0.4 percent, to 16,911 at 2:50 p.m. Eastern time. The blue-chip index had fallen as much as 180 points in the first half hour of trading on news out of Europe about accounting irregularities at a company connected to a major Portuguese bank. That revived fears of another European debt crisis.
The Standard & Poor's 500 index fell eight points, or 0.4 percent, to 1,964 and the Nasdaq composite fell 20 points, or 0.5 percent, to 4,399. Eight out of the 10 industry groups in the S&P 500 index fell, with telecoms and utilities the only industries in positive territory. Those industries are where investors go when they want the safety of steady dividend income.
PORTUGAL QUESTIONS: Worries emerged overnight about the financial stability of a Portuguese bank. The tensions center on Espirito Santo International, a holding company that is the largest shareholder in a group of Espirito Santo family companies, including the parent of Portugal's largest bank, Banco Espirito Santo.
Espirito Santo International reportedly missed a debt payment this week and was cited for accounting irregularities — issues that sparked Europe's debt crisis four years ago. The bank's share price fell sharply and is an unwelcome relapse for investors. Portugal concluded its three-year international bailout program in May.
RESCUE FEARS: Portugal is one of the smaller eurozone economies and, like Greece and Ireland, needed an international rescue in 2011 during the continent's debt crisis. A three-year economic recovery program was supposed to straighten out its finances. Difficulties at Banco Espirito Santo have triggered fears there not everything is resolved in the eurozone.