US Stocks nosedive on EU contagion fears (ext)

NEW YORK (CNNMoney) -- Stocks took a nosedive in the final hour of trading Wednesday, when investors got spooked by a Fitch report that outlined U.S. banks' exposure to contagion from European sovereign debt.

The report set off a dramatic shift in investors' mindset, as stocks had been buffered from larger fears about Europe by positive economic data out of the U.S.

The Dow Jones industrial average (INDU) dropped 191 points, or 1.6%; the S&P 500 (SPX) lost 21 points, or 1.7%; and the Nasdaq composite (COMP) fell 47 points, or 1.7%.

"People are puking European government bonds regardless of what country is listed on the bonds," said Uri Landesman, president of the hedge fund Platinum Partners. "If Europe is going to hell in a handbasket, it doesn't matter what happens in the U.S."

Still, for most of the day, investors held onto hope offered by some auspicious U.S. economic reports released Wednesday. The reports indicated a rise in confidence among homebuilders for the second straight month, and industrial production jumped more than expected.

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

Oil for December delivery added $3.22 to $102.59 a barrel.

Gold futures for December delivery fell $7.90 to $1,774.30 an ounce.