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​Why Portugal is casting a pall over U.S. markets

Portugal has spooked the world markets.

Concerns over the health of a major Portuguese lender has sent jitters throughout European markets and in the U.S., where stocks slipped in early trading.

The Dow Jones Industrial Average fell 153 points in early trading on Thursday, while markets ranging from London to Italy also saw losses. The Portuguese lender, Banco Espirito Santo, saw its stock trading halted after its shares plunged by more than 17 percent.

The problems at Banco Espirito Santo stem from revelations in May of accounting irregularities, which it said at the time placed it in an "extremely negative financial situation." But concerns grew on Thursday after its parent company delayed coupon payments for some short-term debt instruments, The Wall Street Journal notes. With Portugal just exiting a three-year, 78 billion euro ($106 billion) bailout in May, the latest twist has investors concerned about the stability of the country's banking system.

"The concern of an event like this is always determining whether it's occurring in isolation or whether it's the first domino," Federated Investors fund manager Lawrence Creatura told Bloomberg News. "It's a classic flight to safety across the equity, commodities and bond markets."

While Portugal's Central Bank said the bank is protected, that didn't reassure investors.

"Should the Portuguese situation continue to deteriorate, risk aversion contagion could quickly spread to other euro zone member states' bonds and other asset classes," GMP Securities' Adrian Miller wrote to clients.

But a bigger issue may be weighing on investors: Concerns about the valuations of everything from real estate to tech stocks. With the Dow Jones industrial average surging 11 percent since the start of the year, some are asking if the stock market is in another bubble.

Almost every asset class is highly priced by historical standards, The New York Times' Upshot noted on Monday. That means potentially low returns for investors, but also comes with another side effect: Jitters about asset bubbles and economic instability.

With Portugal fanning fears, investors looked for safe harbors, sending gold prices up and boosting the share prices of gold-based ETFs, such as SPDR Gold Shares (GLD), which rose more than 1 percent in early trading on Thursday.