Stock and commodities prices fell on Wednesday as worsening fears over the euro zone crisis, particularly Spain, made investors dump risk assets and embrace safe havens, pushing the yield on benchmark US Treasuries to 60-year lows.

Wall Street's S&P 500 index retreated from the previous session's two-week highs, shedding 1 percent. European stocks and global shares also fell by more than 1 percent.

The euro neared a two-year low as Spain's central bank governor said the government would miss its deficit target this year.

“The biggest drag we have on our markets right now is the concern over what is going to happen in Spain if they can't get some liquidity into their banking system,” said Art Hogan, managing director of Lazard Capital Markets in New York.

“You are getting precariously close to a point where the government can't afford to fund themselves if they have to pay those kind of rates - there is going to have to be some sort of intervention here and it's just a function of when.”

Five minutes into the open, the Dow Jones industrial average was down 117.84 points, or 0.94 percent, at 12,462.85. The Standard & Poor's 500 Index was down 13.84 points, or 1.04 percent, at 1,318.58. The Nasdaq Composite Index was down 34.23 points, or 1.19 percent, at 2,836.76.

The benchmark 10-year US Treasury note was up 27/32, with the yield at 1.656 percent - its lowest in at least 60 years - after bids for US government debt and other low-risk investments intensified because of worries that problems in the Spanish banking system could have ripple effects elsewhere.

US and German government yields declined as the yield on 10-year Spanish sovereign debt rose to six-month highs on concerns over how Spanish banks will obtain capital to stay afloat.

Crude oil futures in New York fell 2 percent to below the key psychological support of $90 per barrel. - Reuters