US markets dive over 2% as Italy fears build

The S&P 500 has shed more than 2% at the open alongside other US markets as investors panic over the turmoil in Italy and the growing threat of contagion spreading across Europe.

The S&P 500 was trading down 2.4% at 1,245 points shortly after the open, with the Dow Jones shedding 287 points, taking it to 11,883. US losses spooked other markets already in the red, with the FTSE 100 falling further to stand down 2.3% on the day, a drop of 129 points, which left it at 5,438. Italian 10-year yields remained elevated in afternoon trading at 7.3%, down from an earlier high of 7.5%, despite rumours of ECB buying. Signs of contagion are being seen with Spanish 10-year yields at 5.8% and French 10-year yields at 3.2%. The euro has also fallen sharply, moving down...