Stocks fall on growing unease about Europe

A growing sense that Europe's leaders have failed to contain that region's debt crisis swept through financial markets Wednesday.

The euro dropped below $1.30 for the first time since January, and borrowing costs for Italian government debt jumped. By the end of trading the Dow Jones industrial average had slid 131 points, European stock indexes had fallen 3 percent and gold had 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 agreed 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 1.10 percent, to close at 11,823.48. The Standard & Poor's 500 index fell 13.91, or 1.13 percent to 1,211.82, and the Nasdaq fell 39.96, or 1.55 percent, to 2,539.31 -- AP