In this paper we study a class of semilinear degenerate parabolic equations arising in mathematical finance and in the theory of diffusion processes. We show that blow-up of spatial derivatives of smooth solutions in finite time occurs to initial boundary value problems for a class of degenerate parabolic equations. Furthermore, nonexistence of nontrivial global weak solutions to initial value problems is studied by choosing a special test function. Finally, the phenomenon of blow-up is verified by a numerical experiment.