Wall Street sinks on Europe's debt misery

Wall Street dropped for a third day on worries about the Italian banking sector and Greece's debt crisis, but the S&P 500 managed to hold its 200-day moving average in a sign buyers still see value.

The Dow Jones industrial average dropped 115.42 points, or 0.96 percent, to 11,934.58 at the close. The Standard & Poor's 500 Index fell 15.05 points, or 1.17 percent, to 1,268.45. The Nasdaq Composite Index lost 33.86 points, or 1.26 percent, to 2,652.89.

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 FTSEurofirst 300 index of top European shares fell 0.1 percent to 1,074.16 points, the lowest close in more than three months. Over the week, the index fell 1.2 percent, down for the eighth straight week, on concern about the euro zone and slowing global growth.

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 Nikkei rose 0.9 percent to 9,678.71, its highest close since June 1. Strong resistance is seen at its 200-day moving average of 9,850.The broader Topix index also gained 0.9 percent, to 833.20.