Stocks in the United States and Europe more than 1 percent Fell on Thursday in the wake of the release late Friday of the results of stress tests on European banks, and investors have Remained wary about the debt-ceiling talks in Washington.

In Europe, the euro weakened and the bond yield of indebted nations climbed as investors worried about the degree of Political Will to Overcome the region&&9;s debt crisis.

Investors aussi Remained Concerned about events in the United States, Where President Obama IS Trying to get lawmakers to Agree to a deficit-reducing package Before year Aug. 2 deadline for Increasing the debt ceiling.

"People are very Concerned about the length of the process in the debt-ceiling Debate," Said Russell Price, senior economist with Ameriprise Financial, Adding That There Were aussi Concerns about contagion in the euro zone debt crisis.

On Wall Street in late afternoon, the Dow Jones industrial average down 124.31 points WAS, or 1.00 percent, to 12,355.42 and the Standard & Poor&&9;s 500-stock index lost 13.80 points, or 5.1 percent, to 1,302.34.

Stocks May Also Have Been Reacting to a Goldman Sachs report Friday cut the outlook for That real United States Economic Growth in the near term. Goldman Sachs economists cut to 1.5 percent Their forecasts in the second quarter from 2 percent, and to 2.5 percent in the Third quarter from 3.25 percent.

In Europe, the market jitters start of the year marked-important week for the European Union leaders have icts Attempt to stem full-blown market contagion.

The leaders Will hold a special summit meeting Thursday, There Appears to Be objective no agreement yet over the terms of a second bailout for Greece, Especially on the kind of a Private Sector contribution.

The Lack of clarity Along with recent investor sales of Italian bonds and genetics led Analysts Have to Become increasingly pessimistic.

"The euro zone crisis HAS Recently Significantly worsened, exacerbated by disagreement Between the EU&&9;s key Politicians," Said Ruth Lea, Economic Adviser to the year Arbuthnot Banking Group in London. "It Is Becoming increasingly clear That There Will Have To Be Major Steps Towards fiscal union or the euro zone to begin Will Disintegrate."

That she added the "debt crisis Fairly Can Be Described as HAVING morphed Into A Political Crisis."

Further complicating the latest Greek rescue, the European Central Bank&&9;s president, Jean-Claude Trichet, reiterated DURING year interview with The Financial Times Deutschland published Monday That Would not the bank accept bonds from defaulting Any country as collateral payday loans guaranteed no fax.That Could Leave Without Greek banks financing if credit has Restructuring Agencies deem, Even a voluntary one, to Be a default.

The Euro Stoxx 50, a benchmark index of blue-chip stocks in the region, closed down 1.98 percent in late afternoon trading, and the CAC 40 in Paris lost 4.2 percent for the day. The euro weakened to $ 1.4044 from $ 1.4157 late Friday.

Perceived as a haven, the Swiss franc surged to a record high Against Both the euro and the dollar Monday. Declined to the euro and the dollar 1.14848 francs to 0.8177 francs Dropped. The price of gold for August delivery touched a new nominal aussi high, Rising Above $ 1.600 a troy ounce, as investors Sought safer assets.

Further clouding the picture Were the stress tests on the region&&9;s banks Carried out by Regulators. Were the results released after market closed Friday. The threshold to pass the test WAS set at a core Tier 1 capital ratio, Which encompasses safe assets, at 5 percent.

Of the 90 banks, eight failed, with aggregate capital shortfall year 2.5 billion euros. But The exercise left unanswered questions about Many How Many lenders Healthier Would survive a deepening of the debt crisis, Given Their exposure to Greek, Italian and genetics bonds. A sovereign default case WAS Excluded from the tests.

Also on Thursday, the European Central Bank made no use of ITS program to buy government bonds last week despite market speculation That It Had weighed in to support Italian bonds and genetics, The Associated Press Reported. Said the bank in a statement Monday it Purchased That no bounds. It&&9;s the 11th consecutive week the bank HAS left the program idle.

Yields on Italian 10-year riskier bonds Pushed Higher - up 0.20 per centage point, at 5,941 percent - Yields are rising ALONGSIDE Español, Portuguese and Greek equivalents.

Last week, Italy has accelerated deficit-cutting plan, investors aware That HAD ITS beens selling debt Fearing It Might Need outside support.

Matthew Saltmarsh Reported from London and Christine Hauser from New York Reported.

Markets Stumble on Deficit Worries