NEW YORK (AP) - A growing sense that Europe's leaders have failed to contain that region's debt crisis swept through financial markets Wednesday.
It started with the euro dropping below $1.30 for the first time since January and a jump in borrowing costs for Italian government debt. By the end of the trading day the Dow had lost 131 points, European stock indexes fell as much as 3 percent and gold dropped $76, ending below $1,600 an ounce for the first time in more than two months.
Investors dumped assets that might be seen as risky and piled into the most conservative ones around: the dollar and U.S. government debt.
The market appears to be in "sell now and ask questions later mode," said John Canally, investment strategist at LPL Financial.
Since European leaders reached an agreement to rein in future government budget deficits last week, investors and credit rating agencies have criticized the deal for failing to address current problems. "Markets are impatient," Canally said. "They still can't see how all these efforts will get this situation stabilized."
The Dow Jones industrial average fell 131.46 points, or 1.1 percent, to close at 11,823.48. Caterpillar Inc. fell 4.4 percent, the worst drop among the 30 stocks in the Dow.