Global stocks drop as new Greece concerns arise

US stocks fell for the eighth day in the past 10 on Tuesday as uncertainty stemming from the political stalemate in Greece gave investors another reason to be cautious and sellers came out in force late in the session.

The Dow Jones industrial average dropped 63.35 points, or 0.50 percent, to 12,632.00 at the close. The Standard & Poor's 500 Index lost 7.69 points, or 0.57 percent, to 1,330.66. The Nasdaq Composite Index fell 8.82 points, or 0.30 percent, to 2,893.76.

European shares fell to their lowest closing level since the start of 2012 after attempts to form a Greek government collapsed, hitting heavyweight financial stocks, and traders said markets could slump further in the coming days.

The pan-European FTSEurofirst 300 index fell 0.7 percent to 997.70 points - the first time it had closed down below 1,000 points since Dec. 29. It had earlier fallen as much as 1.1 percent to an intraday low of 993.05 points, its lowest intraday level since Dec. 30 when it reached 991.90 points.

In Asia, the Nikkei share average fell to a 3-1/2 month closing low, weighed down by exporters with exposure to Europe after Greece struggled to form a coalition government, increasing fears that it may have to leave the euro zone.

The Nikkei closed down 0.8 percent at 8,900.74, although it pulled back from the lowest intraday level since the beginning of February in the afternoon session, with traders suspecting the Bank of Japan of purchasing exchange-traded funds to support the market.The broader Topix index dropped 1.2 percent to 747.40.