US stocks dropped on Friday as worries about the Italian banking sector added to anxiety emanating from Europe about passage of a Greek austerity plan, and the S&P 500 once again tested a key technical level. Italian banks UniCredit SpA and Intesa Sanpaolo fell sharply on concerns about their capital positions alongside uncertainty about the eurozone crisis. Trading in the banks' shares was briefly suspended.
Greece's government faced an electorate vehemently opposed to austerity measures that must be passed in parliament next week to avert default, but progress is being made in persuading banks to take part in a second bailout. The Dow Jones industrial average dropped 77.77 points, or 0.65 percent, to 11,972.23. The Standard & Poor's 500 Index lost 10.19 points, or 0.79 percent, to 1,273.31. The Nasdaq Composite Index declined 24.01 points, or 0.89 percent, to 2,662.74. Both the KBW Banks Index lost 1 percent and the S&P Financial Sector Index shed 0.8 percent.