NASDAQ, Dow Jones Industrial Average DOWN [Stock Market UPDATE]

A flurry of factors drove U.S. markets down sharply midday Tuesday, with the Dow Jones Industrial Average off 200 points. Sovereign-debt issues in Europe, particularly those in Ireland, sent shockwaves through Wall Street. Irish Prime Minister Brian Cowen said Tuesday that his nation has enough cash on hand to pay its bills through spring of next year. He also suggested that the country reduced its deficit by 2 percent to 3 percent of its Gross Domestic Product by 2014.

MONDAY’s STOCK MARKET UPDATE, HERE

But austerity measures aside, European Union officials met Tuesday to discuss a potential bailout of the tiny nation, the price tag of which could exceed 100 billion Euros. But Cowen has rebuffed any such plan. Before Tuesday’s meeting among EU principals in Brussels, he put the blame for worldwide financial uncertainties squarely on instability in markets.

“In a context where there is a lot of turbulence and worry and concern, I am just making the point that we will calmly and in a considered way deal with these issues in the days and weeks and months ahead,” Cowen said. The meeting of EU partners was to consider “how we underpin banking and financial stability in the medium and long term.”

Some experts saw no way out for Ireland.

“What I think we’re going to get Is an equity injection into the Irish banks, via the Irish government,” said Peter Boockvar, equity strategist as Miller Tabak. “Ireland will stick to their belief that they do not need money as a sovereign, that they’re funded until the middle of 2011, but their banks need equity.”

Cowen also calmed Irish citizens by assuring that bank deposits would be protected.

Meanwhile, China signaled that it might raise interest rates to cool its overheating economy. The suggestion put pressure of commodities markets, forcing most widely lower. At midday Tuesday, oil had dropped about $2 a barrel, and gold had given back almost $25 an ounce.

The Dow’s midday decline was about 1 percent. Worldwide, markets had retreated. Hong Kong’s Hang Seng fell 1.4 percent Tuesday. The FTSE in Britain was down 2.3 percent.

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