The premium investors demand to hold Belgian government bonds rather than benchmark German debt rose to its widest level since early 2009 on Monday as the country issued 2 billion euros of 2014, 2020 and 2035-dated bonds.
Economist Nouriel Roubini says Portugal should consider asking for a bailout before its financial plight worsens.
European shares were indicated higher Monday, expected to reverse some of last week's losses after the European Union agreed an 85 billion euros ($113 billion) bailout for Ireland at the weekend.
According to a statement released by the Irish government, the country will take €10 billion immediately to boost the capital reserves of its banks. Another €25 billion earmarked for the banks will remain in reserve.
An Irish government minister said he expects an agreement on an EU-IMF bailout loan for Ireland worth approximately €85 billion ($115 billion), but he rejected reports that the aid would carry a punitively high interest rate.
Next week brings November's employment report, a critical bit of data in a week likely to be dominated by readings on the U.S. economy and the developing debt crisis in Europe.
Ireland's banks suffered a string of credit downgrades Friday—one reduced to junk-bond status —as speculation mounted that an EU-IMF bailout of Ireland could require senior bondholders to share the massive bill.
While the market pullback isn't even in the realm of a correction, worries that Europe's debt crisis could hurt the global economy are weighing on what otherwise could be a robust rally.
Here's the disturbing headline statistic: Portugal, Ireland, Greece, and Spain have sucked out 93 percent of the total liquidity taken from the ECB and other central banks.
Belgium faces an important test Monday, when it aims to sell between 1.5 billion euros ($1.9 billion) and 2.5 billion euros worth of bonds in an auction that will indicate the level of investor confidence in the nation plagued by political turmoil and high levels of debt.
Fears of contagion from the euro zone crisis were running high Friday but correlations between markets suggested investors were not as afraid of a systemic crisis as they were back in May and June.
European shares are expected to retreat on Friday after gains in the previous two sessions, with persistent concerns about euro zone debt problems and Chinese inflation seen putting pressure on the market.
Ireland is actually in a better economic position than other struggling euro zone states, Chris Watling, managing director at Longview Economics, told CNBC Thursday.
European shares were set to open higher on Thursday, adding to gains in the previous session, and after Wall Street rose on upbeat economic data.
As shoppers hit the stores this Thanksgiving weekend, investors are likely to keep bidding up retail stocks even as some of those stocks hit multi-year or even all-time highs.
Stocks finished the session sharply higher Wednesday ahead of the Thanksgiving holiday, following a handful of reports that offered some hope that the U.S. economy was improving.
Nations are left with old playbooks and fewer choices by which to resolve their respective problems. This means that time, devaluations, and debt restructurings might be the only way out for many nations. It also means the citizenry will require politicians that can think outside of the box and act with greater unity and resolve than perhaps they are used to.
Stocks were trading sharply higher Wednesday following a handful of reports that offered some hope that the U.S. economy was improving.
Things are getting better in the long term when it comes to the banks and Europe, H. Rodgin Cohen, senior chairman at the law firm Sullivan & Cromwell, told CNBC Wednesday.
The United States faces similar debt troubles to Europe's, yet its large size will spare it from spiraling into a sovereign crisis, Marc Chandler, global head of currency strategy at Brown Brothers Harriman, told CNBC on Wednesday.