Investors, who had started the week reassured by the huge rescue of Europe\u2019s indebted nations, expressed second thoughts on Friday, sending markets lower and further devaluing the euro on concerns that the austerity measures required by the bailout would stunt the Continent\u2019s already anemic economic growth.<\/p>\n
The euro fell to its lowest level in 18 months, and bank stocks on both sides of the Atlantic took a beating.<\/p>\n
Investors seemed fearful that the $957 billion bailout package for Greece and other nations, while providing short-term protection against default, might drag out the economic pain and hurt the financial system in the process.<\/p>\n
A continued hammering of the euro would make European exports cheaper, but the side effect would be weaker American exports, potentially dragging the United States \u201d\u201d and the rest of the world \u201d\u201d back toward recession.<\/p>\n
\u201cWhat you get is markets worrying about a whole cascading of weakness stemming from Europe being transmitted through the euro to the United States,\u201d\u009d said Martin Murenbeeld, chief economist at DundeeWealth Economics in Toronto.<\/p>\n