European Stocks Erase Gain in Final Hour; Banks Retreat

European stocks erased gains in the final hour of trading, led by a selloff in Spanish and Italian lenders, as optimism faded that Spain’s 100 billion euro ($125 billion) bank bailout will contain the sovereign debt crisis.

Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA erased gains after Fitch Ratings Services downgraded Spain’s two biggest lenders. UniCredit SpA and Intesa Sanpaolo SpA both tumbled more than 5 percent as bond yields rose. Volkswagen AG paced advancing shares.