NEW YORK — A wave of selling swept across Wall Street and stock markets around the world Tuesday after Greece’s prime minister said he would call a national vote on an unpopular European plan to rescue that country’s economy.
The Dow Jones industrial average finished down nearly 300 points. It swung in 100-point bursts throughout the day as investors reacted to sometimes-conflicting headlines about the next steps in Greece’s long-running debt crisis. Treasurys and other assets considered safe surged. The stocks of major banks, including Citigroup and JPMorgan Chase, were hit hard.
Intense selling roiled markets in Europe. Italy’s main stock index dropped 6.8 percent, France’s 5.4 percent and Germany’s 5 percent.
The value of the dollar rose, and bond prices jumped so drastically that analysts were stunned. They said the bond action reflected fears that the turmoil in Greece would tear at the fabric of Europe’s financial system and create a crisis that could engulf the European Union.
“This brings all of the concerns about Europe back to the front burner,” said Scott Brown, chief economist at Raymond James. “If this ends up turning into a financial catastrophe in Europe, then no one will escape it.”
It was only Thursday that European leaders announced a deal they believed would be a turning point in the two-year debt crisis.
“The stock market is expressing disgust with Greek politics and a lack of confidence that Italy and Spain will generate the growth needed to pay down their debt,” said Peter Boockvar, equity strategist at Miller Tabak.
The Dow fell 297.05 points, or 2.5 percent, to close at 11,657.96. The Standard & Poor’s 500 lost 35.02, or 2.8 percent, to 1,218.28. The Nasdaq composite dropped 77.45, or 2.9 percent, to 2,606.96.
