Europe Girds for Greece

ppteam

With sovereign downgrades and wobbly banks on the continent, worries about how euro-zone, European and global financial woes will play out. U.S. equities rise, but this is no time to issue debt.
In a reversal of the recent flight to safety, yields on U.S. Treasuries rose as stocks mounted a midweek rally and the latest economic data showed growth with some forward momentum, however modest.

But the debt and equity markets continue to fret about the European crisis, which appeared about to claim its latest victim, Dexia Group, a French-Belgian institution that improbably has a significant role in the U.S. municipal-bond market. Late Friday, Moody's put its double-A1 rating of Belgian's sovereign debt under review, citing the difficulty it may face in funding its obligations, given the "challenges" facing Europe's banks and the increased possibility of having to bail out Dexia.

That followed Moody's downgrade of Italy's sovereign debt earlier in the week, a three-notch slash to single-A2, which was followed by reductions in Italy's and Spain's credit ratings by Fitch, to single-A-plus and double-A-minus, respectively. To help provide liquidity to the banks that are the main creditors to the euro zone, the European Central Bank Thursday said it will extend its lending plan and purchase up to