European debt turmoil could be spreading

Prices fell and bond yields rose in Austria, the Netherlands, Finland and France - nations that have been spared the brunt of the financial crisis. Much of the selloff came after news of the European economy growing only slightly in the third quarter. The fear is that investors are losing confidence in the ability of European leaders to keep the debt problems contained. From the WSJ:

For months, a worst-case scenario of European policy makers has been that the crisis, born in heavily indebted countries, would infect otherwise healthy countries at the heart of the monetary union. Tuesday's trading suggests that could now be happening. If investors go on a buyers strike of European debt, that could raise borrowing costs, and eventually threaten the solvency of much of the euro zone. That could destabilize the global financial system and damage worldwide economic growth.

What's interesting - and somewhat unnerving - is that Wall Street, which in recent weeks has been scrutinizing every headline out of Europe, turned in a relatively tame session, with the Dow gaining 17 points.