Specialist Christopher Trotta works on the floor of the New York Stock Exchange Monday, June 25, 2012. U.S. stocks are sliding at the opening of trading, following global markets lower after Spain requested help for its struggling banks. (AP Photo/Richard Drew)
Specialist Christopher Trotta works on the floor of the New York Stock Exchange Monday, June 25, 2012. U.S. stocks are sliding at the opening of trading, following global markets lower after Spain requested help for its struggling banks. (AP Photo/Richard Drew)
Specialist Gregg Maloney works on the floor of the New York Stock Exchange Monday, June 25, 2012. U.S. stocks are sliding at the opening of trading, following global markets lower after Spain requested help for its struggling banks. (AP Photo/Richard Drew)
NEW YORK (AP) ? Europe's latest efforts to quell its financial crisis left investors exasperated Monday, causing steep losses in stock markets on both sides of the Atlantic.
The Dow Jones industrial average dropped 154 points in early afternoon trading to 12,486, a loss of 1.2 percent. The broader Standard & Poor's 500 index fell even more, 1.7 percent.
In Europe, Spain formally asked help for its ailing banking system but its request left many questions unanswered, including how much of the $125 billion loan package offered by other European nations it needed. The uncertainty unsettled markets, pushing borrowing costs higher for Spain's government. Spain's stock market plunged 3.7 percent.
"Right now it's all about Europe, and confidence is pretty low," said Doug Cote, chief market strategist for ING Investment Management. "The policies that they proposing are too little too late."
Energy and bank stocks fell the most. Many analysts believe big banks would be the first to feel the hit of a freeze-up in Europe's financial system if Spain isn't able to convince bond markets that it can rescue its troubled banks. Spain's banks have been hobbled by a collapse of a real-estate bubble, and the country has been inconsistent about how much help it will need to keep its banks intact.
Bank of America dropped 4 percent, the biggest fall among the 30 stocks in the Dow Jones industrial average. BofA's stock lost 34 cents to $7.60. JPMorgan Chase fell $1.13 to $34.90 and Citigroup plunged $1.46 to $26.52.
Analysts worry that Europe's piecemeal approach to its spreading government debt crises could backfire, causing the banking system of a large country like Spain's to collapse. That could send shock waves through tightly connected global financial markets.
"It's the same headline risk that we've been dealing with for God knows how long," said Chip Cobb, senior vice president of Bryn Mawr Trust Asset Management in Pennsylvania. "Everybody wants something to happen sooner or later, and nothing's happening."
European leaders are gathering at the end of this week for another summit aimed at reining in the crisis, but market players remain skeptical that Germany will sign off on efforts to quell the crisis.
"What the market wants is action," said Cote. He said investors wanted to see steps toward binding the weak and stronger economies closer together in a fiscal union.
The dollar and Treasury prices rose as investors shifted money into low-risk investments. The yield on the 10-year Treasury note fell to 1.60 percent from 1.67 percent late Friday.
In other trading, the S&P 500 index fell 23 points to 1,311. All but 13 of the stocks in the index fell, and all 10 of the index's industry groups fell. The Nasdaq composite lost 54 points to 2,838.
Energy stocks were also big losers after the price of crude oil fell again. Crude lost $1.54 a barrel to $78.22, continuing a slump that has brought the price down from $110 in late February. Exxon Mobil fell $1.45 to $80.66.
Energy prices have been falling as traders anticipate that slower growth in China and the lingering government debt crisis in Europe will drag down global economic growth and decrease demand for energy.
European markets closed sharply lower. Stocks are down 4 percent in Italy and 2 percent in both France and Germany. Shares of European banks including Spain's Banco Santander SA and Deutsche Bank AG sank.
Borrowing costs rose for Spain and Italy, a sign of skepticism that those countries will be able to pay their debts. The yield on Spain's 10-year government bond rose 0.16 percentage point to 6.58. That's dangerously close to the 7 percent level past which Greece and Portugal had to seek emergency loans from their European neighbors when their borrowing costs stayed above that level.
Among other stocks making big moves Monday:
? Teva Pharmaceutical Industries rose 6 percent after the drugmaker said a federal court reaffirmed patents protecting its multiple sclerosis treatment Copaxone. The stock rose $2.26 to $40.29.
? Chesapeake Energy dropped 8 percent after Reuters reported that the company colluded with a Canadian rival to suppress land prices in areas that were considered rich in oil and natural gas. The stock lost $1.52 to $17.09.
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AP Business Writers Bernard Condon and Christina Rexrode contributed to this story.
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