Global stocks, euro, oil sink over Grexit jitters

New York: The threat of a financial crisis spreading from Europe shook markets on Wednesday. The euro dropped to a nearly two-year low against the dollar. Oil prices sank to their lowest this year, and stocks took another fall. 

    The Dow Jones industrial average fell 180 points to 12,322 shortly after noon Eastern US time. The Dow has lost 6.7% this month, nearly wiping away all its gains for the year. Energy, banks and technology stocks fell the most. 

    In Brussels, leaders of the 27 countries that make up the European Union met to discuss ways to keep the debt crisis in Europe from getting worse, including proposals to promote jobs and growth. 

    Analysts are turning increasingly skeptical that European leaders will succeed at preventing Greece from dropping the euro or agree on ways to jump-start the region's economy. The Organization for Economic Cooperation and Development warned Tuesday that the 17 countries that use the euro risk falling into a "severe recession." 

    Germany's DAX and France's CAC-40 closed more than 2% lower. The euro continued falling against the dollar, reaching $1.25, its lowest level since July 2010. Concerns about the stability of the European currency union if Greece leaves have knocked 5% off the euro this month. Yields on German government bunds fell as money shifted into low-risk investments. 

    If Greece exits, it could spread havoc throughout the global financial system. Bond traders may turn on other struggling governments in Spain and Italy. One big fear is that people in Spain and Italy will start a bank run, pulling euros out of banks for fear that their countries will soon follow Greece's lead. European banks have close ties to US banks. 

    In other trading, the Standard & Poor's 500 index fell 19 points at 1,297. The Nasdaq composite index slumped 42 points to 2,796. 

    Benchmark crude lost $1.50 to $90.37 in New York. It fell as low as $90.18 earlier in the day. Prices haven't been below $90 since November 1. 

    The dollar rose and yields on US government debt fell as traders shifted money into the protection of Treasurys. The yield on the 10-year note sank to 1.71%, close to a record low, from 1.77% late Tuesday. AGENCIES