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Wednesday, November 2, 2011

US Stocks fall hard on Greece fears (ext)

NEW YORK (CNNMoney) -- New fears about the fate of the European rescue plan reverberated through stock markets in the United States and around the world Tuesday.

Following European markets, U.S. stocks ended sharply lower across the board. Bank stocks were hit especially hard.

The bad news was propelled by Greek Prime Minister George Papandreou's surprise announcement that he would put his country's participation in last week's European debt plan to a voter referendum.

The announcement spooked investors, who feared a public vote would jeopardize the carefully-crafted deal.

Tuesday afternoon, stocks clawed back from the lowest levels of the day following a Dow Jones report that said the referendum is "basically dead." But just minutes before the market close, other news reports said the referendum will go ahead.

In the end, the Dow Jones industrial average (INDU) finished 297 points lower, falling 2.5%, the S&P 500 (SPX) sank 35 points, or 2.8%, and the Nasdaq (COMP) lost 77 points, or 2.9%. Earlier, all three indexes were off around 3%.

"Investors don't know what the referendum is going to mean, but they're selling first and will ask questions later," said Luschini. "If Greece ends up demanding different terms to the deal, European officials will be less willing to help. And that could put the prospect of a disorderly Greek default back on the table."

The dollar rose against the euro and British pound, and versus the Japanese yen.

Oil for December delivery slipped $1.00, or 1.1%, to settle at $92.19 barrel.

Gold futures for December delivery fell $13.40, or 0.8%, to settle at $1,711.80 an ounce.

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