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U.S. stock futures were dragged lower Wednesday, with the euro trading near 23-month lows against the dollar, as worries over the euro zone crisis intensified.
Futures had briefly pared their losses earlier after the European Commission said the euro zone must move towards a banking union, issue eurobonds and boost growth while cutting debt.
The report came as fears grew that Spain would be the next country in the euro zone to trigger a crisis after reports that the European Central Bank rejected Madrid’s plan to rescue its banking sector by tapping the central bank itself for funds.
The ECB denied the reports later in the day, saying in a statement it had "not expressed a position on plans by the Spanish authorities to recapitalize a major Spanish bank." It added that it "stands ready to give advice on the development of such plans."
European shares slipped and the euro touched a 23-month low as investors worried that Spain's banking problems would push its borrowing costs near highs not seen since last November. And worries over Italy's borrowing costs also raised alarm, pushing the Italian 10-year bond above 6 percent.
Meanwhile, investors continue to hold their breath until Friday’s jobs data are released.
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