Stocks fall sharply as EU summit hopes wane

A look at why the markets are moving lower ahead of Europe's summit, and why the big investors are moving to U.S. Treasury bonds, with Todd Colvin, R.J. O'Brien interest rate products.

By msnbc.com news services

U.S. stocks tumbled at the opening of trading, following global markets lower after Spain requested help for its struggling banks.

The Dow Jones industrial average is down 145 points to 12,497 shortly after the opening bell Monday.

The Standard & Poor's 500 index fell 18 points to 1,317 and the Nasdaq composite lost 40 points to 2,853.

Spain isn't saying how much of the 100 billion euros made available by the European Union that it will need. The request comes just ahead of a critical European economic summit in Brussels.

Investors have been losing faith that Europe will act quickly to address the financial problems at countries most at risk.

European markets are sharply lower. Stocks are down 3 percent in Spain and Italy.

Markets continue to react to European headlines as the spiraling debt crisis in Europe could further hurt an already weak global economy. Austerity measures pushed forward by Germany have Greece mired in a long recession, and investors worry Spain could follow Greece's path as Madrid's borrowing costs remain stubbornly high.

A German government spokesman said the EU will probably not take any decisions on Greece in a summit scheduled for Thursday and Friday, in which Greeks were hoping to ease the terms of their bailout.

"There's a sense the EU summit is going to be inconclusive, so we're seeing risk assets fall," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Cardillo said the market will focus this week on Europe, but the lagging fear is a stalling global economy.

"The European situation is just a big excuse. If, all of a sudden, we see economic growth in Asia and the United States, Europe would be a secondary deal for the market and not the focus."

U.S. stocks ended higher on Friday, led by gains in bank shares, as the S&P 500 index bounced back from its second-worst decline of the year. The gains were not enough, however, to push indexes into positive territory for the week.

The Associated Press and Reuters contributed to this report.

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