At a meeting of European finance ministers in Poland, leaders largely rejected proposals from Treasury Secretary Timothy Geithner on how to rescue the ailing eurozone.
European leaders in Brussels today agreed to a deal for Greece that includes $156 billion in aid, private investors, and extending the maturity period on Greek bonds.
Investors in Europe have set their sights on Italy, speculating that if a Greek bailout isn't approved and Athens defaults on its government debt, Italy is next.
With high debt and falling stocks, Italy appears to be the next European economy on the brink. Investors and European officials are now sounding alarm bells.
Greece bailout talks involve a second rescue package roughly the size of the first. But Greece bailout could be delayed until July.
Tens of thousands of protesters crossed police lines as Greece's parliament prepared to vote on new austerity measures to avoid what could be a devastating default.
The Dow fell about 61 points, with a weak performance by banks and energy
The collapse of Portugal's government raised the likelihood of a bailout and set back efforts to beef up a financial rescue package for troubled European economies.
EU ministers continue to worry that Ireland's debt crisis will drag down financial markets. Ireland says its debts are covered until mid-2011.