LOS ANGELES, CA (Catholic Online) - Major U.S. stock indexes fell more than one percent with European stocks falling even more. The euro dropped to a nearly two-year low against the dollar. Borrowing rates for Italy and Spain, which many think will be the next problem cases in Europe's debt drama rose dramatically as traders' dumped bonds issued by those governments.

The increased demand for low-risk, easily tradable securities pushed the yield on the 10-year Treasury note to 1.64 percent from 1.74 percent later. German government bond yields, also viewed as safe, turned lower.

The Dow Jones industrial average plunged 147 points to 12,433, making for an abjectly miserable month of May. The Dow was down 5.9 percent for the month, putting it on track this week to end its first losing month since September.

Pessimism over the European Union was everywhere. The European Commission reports that consumer confidence fell sharply in the region last month. Spaniards withdrew money from their banks, spreading anxiety.

An opinion poll in Greece showed that the far-left Syriza party is gaining support ahead of key elections. Syriza opposes the system of bailouts and sharp budget cuts that have kept Greece afloat -- but also punished its economy. If the Syriza party wins, Greece may be forced to exit the euro currency. The shockwaves could topple nations that have received bailouts, such as Portugal, and hinder nations that might need them, such as Italy.

Europe's executive branch have called on the 17 nations that use the currency to create a "banking union" that can centrally oversee, or if necessary bail out the sector.

If Europe's financial crisis plunges it into a heavy recession, global economic growth will likely falter. A recession would reduce demand for commodities and machines that power growth. Traders pushed heavy equipment maker Caterpillar and aluminum company Alcoa to the biggest declines among the 30 companies that make up the Dow.

The euro fell the lowest since the summer of 2010, as little as $1.2387. Benchmark stock indexes plunged 2.7 percent in Spain, 2.2 percent in Italy and 2.4 percent in France.

In other U.S. trading, the Standard & Poor's 500 index lost 17 to 1,315. The Nasdaq composite average slid 37 to 2,833.

Metals, food and energy commodities all fell sharply. Crude oil lost nearly $3 to $88 a barrel. Crude has been falling steadily since the beginning of May, when it traded as high as $106 a barrel.

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