Political uncertainty in debt-hobbled Europe spread to financial markets Tuesday and pushed stocks lower in Europe and the United States.
The Dow Jones industrial average was down almost 200 points at its low point for the day before recovering most of its losses to finish down 76. It was the averages fifth consecutive decline.
A flurry of late-day buying helped the indexes recover from their earlier lows. The Dow closed down 76.44 points, or 0.6 percent, at 12,932.09. The Standard & Poors 500 index fell 5.86 to 1,363.72. The Nasdaq composite index fell 11.49 to 2,946.27. The S&P had been down almost 22 points and the Nasdaq almost 58.
European indexes closed near their lowest levels in months, and the euro neared a five-month low against the dollar.
Prices plummeted for commodities such as oil and copper that depend on the health of the world economy. The turmoil in Europe added to concerns about slower economic growth in China and weaker job creation in the U.S.
Trading throughout the markets is growing more volatile as Europes debt crisis accelerates to a point where its not really controllable with the sorts of Band-Aids theyve used, said Daniel Alpert, managing partner at the investment bank Westwood Capital Partners LLC.
Greek voters on Sunday rejected parties that had imposed the deep spending cuts demanded by Greeces bailout lenders. Cuts to pensions and social programs are deepening Greeces crushing recession.
On Tuesday, the left-wing politician struggling to form a new government declared that the country was no longer bound by its promises cut spending sharply in exchange for international bailout loans.
The politician, Alexis Tsipras, also demanded a moratorium on repaying the part of Greeces debt that is onerous. The main stock index in Greece closed down 3.6 percent after a 7 percent decline the day before.
After a calm finish Monday, benchmark indexes in Germany and France plunged to near their lowest levels this year. Italys was near its lowest since last November. The main stock index in Britain hit its lowest point this year.
Central banks have injected billions into Europes financial system, providing temporary support for stock and commodity prices, Alpert said. If that liquidity is supposed to prime the pump, and the pump doesnt take over, then youve got a problem, he said.
In the U.S., traders dumped risky assets and commodities, partly because of concern that a punishing recession in Europe would hurt economic demand. The price of oil continued its week-long slide. Copper and silver each lost more than 2 percent.