MILAN (AP) — European stock markets mostly sank Thursday amid signs that debt market turmoil roiling Spain is threatening Italy, which is considered too big to bail out. A rally on Wall Street, where traders hoped for more stimulus from the Federal Reserve, helped limit losses.

Spain’s 10-year bond yield — a key indicator of a country’s creditworthiness — rose to near 7 percent, a euro-era record for the country, after Moody’s downgraded the country by three notches. Madrid accepted up to €100 billion ($125 billion) in loans to rescue its banks, but investors are worried the government may be unable to repay the money.