US stocks dropped as worries about the Italian banking sector added to anxiety emanating from Europe about passage of a Greek austerity plan, and the S&P 500 once again tested a key technical level.
In noon trade, the Dow Jones average had dropped 87.11 points, or 0.72 per cent, to 11,963.38. The S&P 500 Index lost 11.29 points, or 0.88 per cent, to 1,272.21. The Nasdaq fell 25.01 points, or 0.93 per cent, to 2,661.76.
European shares extended their losing run to eight weeks – the longest losing streak since 1998 – as uncertainties about Greece's debt crisis persisted, and with Italian banks falling heavily.
The FTSE Eurofirst 300 index of leading European shares fell by 0.71 points, or 0.07 per cent, to close at 1,074.95 points. During the week, the index had fallen by 1.1 per cent. The STOXX Europe 600 Banking Index fell by 1.6 per cent.
The Nikkei average rose to a three-week closing high, helped by news that Greece has agreed to a five-year austerity plan and as a fall in oil prices eased worries about a slowdown in the US economy. The benchmark index rose 0.9 per cent to 9,678.71, its highest close since 1 June. The broader Topix index also gained 0.9 percent, to 833.20. The slide in oil prices boosted shares of shipping firms with Mitsui OSK rising 3.2 per cent to 417 yen.