U.S. stocks slide as Europe crisis deepens

For the past few days, the U.S. stock market was able to forget about problems in Europe.

Friday put Europe squarely back in the spotlight.

U.S. stocks fell sharply as escalating problems in Spain jolted investors. Spain's stock market plunged 6 percent and its borrowing costs spiked after a regional government asked for a financial lifeline.

The drop on Wall Street, which sent the Dow Jones industrial average down as much as 133 points, marked a U-turn for the market. Stocks had risen over the past three days as investors focused on healthy earnings from U.S. companies like Mattel, Honeywell and Coca-Cola.

On Friday, talk of sluggishness in Europe was prevalent as more companies turned in their quarterly results.

Staffing agency Manpower fell 6.27 percent, to $33.46, and chip maker Advanced Micro Devices fell 13.17 percent, to $4.22, after reporting that weak demand in Europe had dragged down second-quarter revenue.

Xerox trimmed its earnings forecasts as Europeans bought less equipment; its stock fell 49 cents to $6.70.

All the major U.S. stock indexes fell. The Dow Jones industrial average dropped 120.79 points to 12,822.57. The Standard & Poor's 500 fell 1.01 percent to 1,362.66. The Nasdaq composite index dropped 1.37 percent to 2,925.30. All three indicators eked out tiny gains for the week and are about flat for the month to date.

-- AP