NEW YORK—Investors sold risky assets, including emerging-market debt and stocks, as fears over the fiscal health of euro-zone countries increased the appeal of safer haven German and U.S. government bonds.

Standard & Poor's Corp. sparked the selloff by cutting Greece's debt rating to "junk" territory and lowering Portugal's debt ranking two notches. With other concerns, such as the looming overhaul of U.S. financial regulation and Wednesday's interest-rate decision from the Federal Reserve, adding to the uncertainty, investors...