Wall Street drops, European shares steady

Stocks fell on Wednesday, with selling accelerating late in the session on more warnings about the potential impact of the euro zone's debt crisis on the global economy and the banking system.

The Dow Jones industrial average lost 190.57 points, or 1.58 percent, to 11,905.59. The Standard & Poor's 500 fell 20.90 points, or 1.66 percent, to 1,236.91. The Nasdaq Composite dropped 46.59 points, or 1.73 percent, to 2,639.61.

European shares closed flat after early losses as Mario Monti's move to form a new technocrat government in Italy and a pledge by Greece's LAOS party to give unconditional support to the new Greek leader provided some relief to markets.

Defensive healthcare stocks rose 0.3 percent, helping the FTSEurofirst 300 index of top European shares to recover to end flat at 970.60 points after falling to a low of 963.35 earlier in the session.

In Asia, the Nikkei stock average lost nearly 1% in thin trade but stayed in recent ranges as investors remained on edge about developments in the euro zone debt crisis.

The Nikkei share average closed down 0.9% at 8,463.16. The broader Topix index also shed 0.9 %, to 724.11.