Wall Street succumbs to Europe fears

U.S. stocks struggled to decide which way to go for much of the day Wednesday, then dropped heavily toward the end of trading as a contentious election in Greece and the broader debt maelstrom in Europe dampened investing.

The major indexes opened in the red, then drifted between small gains and losses for most of the day. But sellers took hold at midafternoon.

At the close, the Dow Jones industrial average was down 77.42 points at 12,496.38. The Standard & Poor's 500 was down 0.70 percent to 1,314.88. The Nasdaq was off 0.86 percent at 2,818.61.

In the European debt crisis, the finance minister of Cyprus added to the undercurrent of alarm when he warned that the small island country may seek its own bailout this week.

Spain's 10-year borrowing rate inched up to 6.71 percent from 6.67 percent. Other countries in Europe have had to seek bailouts when their borrowing rates hit 7 percent.

European countries will lend up to $125 billion to Spain's banks, but that has not soothed markets. Italy, perhaps the next flash point in Europe's debt crisis, had a setback of its own. Its 10-year borrowing rate rose to 6.07 percent from 6.02 percent the day before, and the country had to pay a sharply higher rate in a sale of one-year bonds.