Fitch slashes Spain's credit rating

Fitch said its downgrade reflects that Spain's efforts to reduce its debt "will materially reduce the rate of growth of the Spanish economy over the medium term," said Brian Coulton, head of Fitch's sovereign ratings unit, in a statement.

The rating agency cited a weak job market, several bank restructurings and high government debt as major hindrances to Spain's recovery. Still, Fitch reaffirmed its "stable outlook" and kept Spain's short-term rating unchanged at "F1+."

Why Europe may kill the U.S. recovery

European nations have faced a slew of downgrades in the past several weeks, including Standard and Poor's cut of Greece's debt to junk status. S&P also lowered Spain's and Portugal's investment grade status in April.

Fitch's move slammed U.S. stocks Friday, which took a dive in thin trade ahead of the Memorial Day holiday.

Worries that the debt crisis will snowball and spread throughout Europe have battered markets lately. Continued uncertainty about the zone's future has also weighed on its currency -- the euro has fallen more than 6% in the past month. 

S&P downgrades Greek debt to junk statusBills ignore ratings agencies