Are Portugal, Spain Next?
Byline: Barry Hatton and Alan Clendenning Associated Press
LISBON, Portugal -- Europe's efforts to contain its debt crisis came under increasing strain Tuesday as bond market jitters shook Portugal and Spain, seen as the 16-nation eurozone's next weakest links now that Ireland has followed Greece by accepting a massive international rescue.
The nations' borrowing costs rose, suggesting investors are more worried about default, while Spain limited the size of a bond sale because traders demanded sharply higher premiums.
Stock traders panicked and dumped shares across all sectors, sending Portugal's benchmark stock index down 2.2 percent by the close, while Spain's sank 3.1 percent to a level not seen since July. The euro slid below $1.34 for the first time in two months.
Spooked by the scale of Greece's bailout requirements in May and Ireland's banking failures, international investors are looking much closer at the public finances of eurozone countries and they don't like what they're seeing, particularly in Portugal. …