World stock markets are plunging on new fears that Spain could need an international bailout.

Spain's borrowing costs topped 7.5 percent, and stock indexes in Asia, Europe and New York all fell sharply. Some exchanges were down 2 percent or more.

Europe already has agreed to grant Spain a rescue packet of up to $122 billion to shore up its stressed banking system. But Spanish Minister of Economy Luis de Guindos denied Monday that Madrid will need assistance from the 17-nation euro currency zone.

Moody's Investors Service on Monday changed its ratings outlook to negative for Germany, the Netherlands and Luxembourg, citing uncertainty about the euro zone's ongoing debt crisis.

Germany has Europe's strongest economy and finances most of the bailouts given to struggling European Union members Greece, Portugal and Ireland.

The value of the euro dropped Monday to a new 2-year low against the U.S. dollar, falling below $1.21 in inter-day trading.

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