Worries About Spain Weigh on Euro Zone PARIS - All eyes were fixed Wednesday on Spain, as the country's borrowing costs showed no signs of slowing their climb amid nervousness about the health of the banking sector and the possibility of the crisis spreading to other euro countries. Europe's economic stagnation and continuing financial turmoil in the euro zone have weighed on confidence, the European Commission said Wednesday. The commission's indicator of business sentiment in the 17-nation euro zone fell in May to 90.6 from April's revised 92.9. The decline, it said, "was driven by falling confidence in all business sectors, especially in industry and retail trade." Jonathan Loynes, an economist in London with Capital Economics, noted that the sentiment data showed "acute weakness across the peripheral economies," but that the Dutch, French and Germans were also less optimistic. He described it as "overall, an unambiguously weak picture which only looks likely to get worse as the debt crisis continues," and predicted that euro zone gross domestic product would decline by 1 percent this year, with 2013 "likely to be much worse." With Washington increasingly concerned that the euro crisis will spill over into the United States, and into election-year politics, Treasury Secretary Timothy F. Geithner has dispatched Lael Brainard, a Treasury undersecretary for international affairs, to Europe for meetings with senior officials "to discuss their plans for achieving economic stability and growth in Europe," according to a Treasury statement. The Greek government issued a brief statement Tuesday saying that Finance Minister Giorgos Zannias and Ms. Brainard had discussed "matters relating to developments in Europe and Greece." Ms. Brainard will be also be in Germany, Spain, and France this week. On Tuesday, the governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, added to the sense of crisis, announcing that he would step down early, on June 10. Mr. Fernández Ordóñez has taken some heat over a new bailout request from Bankia, the country's biggest mortgage lender, which said Friday that it would need another 19 billion euros, or $24 billion. The yield on Spanish 10-year bonds, which moves in the opposite direction of the price, rose 20 basis points to 6.60 percent in Wednesday afternoon trading. At the same time, investors sought refuge in U.S. and German government debt. The yield on 10-year U.S. Treasuries fell 3 basis points to 1.7 percent, while comparable German bonds traded to yield 1.33 percent, 5 basis points lower. At those yields, Germany could issue debt at a rate about 5.3 percentage points more cheaply than could Spain. The spread, or gap, between Spanish and German bonds reached a euro-era record Wednesday, Bloomberg News reported. Italian 10-year bond yields rose 24 basis points to 5.98 percent. The Italian Treasury on Wednesday sold 5.7 billion euros of bonds, short of the nearly 6.3 billion euros it had targeted. As part of the auction, it sold 2.3 billion euros of 10-year debt priced to yield 6.03 percent, up from the 5.84 percent it paid to sell such debt last month. In another sign of how the euro zone's problems are being felt in the "real economy," the European Central Bank reported Wednesday that loans to households and companies in the currency area grew in April by just 0.3 percent from a year earlier, the weakest growth since May 2010. The Euro Stoxx 50 index, a barometer of euro zone blue chips, fell 1.1 percent, while the FTSE 100 index in London fell 1.4 percent. The Madrid benchmark Ibex 35 stock fell 2.4 percent. Standard & Poor's 500 index futures fell, suggesting Wall Street stocks would open lower. The S&P 500 rose 1.1 percent on Tuesday. The dollar rose against major European currencies. The euro fell to $1.2436 from $1.2503 late Tuesday in New York, while the British pound fell to $1.5574 from $1.5641. The dollar rose to 0.9656 Swiss francs from 0.9606 francs. But the U.S. currency fell to 79.09 yen from 79.49 yen. Comex gold futures rose 0.1 percent to $1,550.00 an ounce. Gold is down about 3.2 percent in 2012. Asian shares declined. The Tokyo benchmark Nikkei 225 stock average slipped 0.3 percent. The Sydney market index S.&P./ASX 200 index fel 0.5 percent, and in Hong Kong, the Hang Seng index fell 1.9 percent. Most trading is carried out by the computer programs of big banks and investment funds over high-speed networks and does not necessarily offer a complete picture of market sentiment. Jack Ewing contributed from Frankfurt and Niki Kitsantonis from Athens.