STOCK MARKET WATCH -- Wednesday, 25 January 2012

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48. Ailing Portugal's bond yields hit record highs

http://hosted.ap.org/dynamic/stories/E/EU_PORTUGAL_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-01-25-10-23-27

LISBON, Portugal (AP) -- The yield on Portuguese bonds in the secondary market climbed to euro-era records Wednesday amid market fears that the bailed-out country won't be able to break free of its financial crisis in the near future.

The yield on 3-year bonds reached 19.4 percent Wednesday. The rate on 5-year bonds was 18.7 percent and on 10-year bonds was 14.6 percent.

Portugal needed a euro78 billion ($101 billion) rescue package last year as its high debt load and feeble growth pushed it towards bankruptcy. A three-year program of austerity measures and economic reforms is aimed at restoring investor confidence in the eurozone country, but a deepening recession, with a 3.1 percent contraction forecast for this year, is undermining market faith in Portugal.

Standard & Poor's recently joined the two other major ratings agencies Fitch and Moody's in downgrading Portuguese debt to junk status.