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Associated Press

NEW YORK - Europe's latest efforts to quell its financial crisis left investors exasperated Monday, causing steep losses in stock markets on both sides of the Atlantic.

In Europe, Spain formally asked for help to rescue the country's ailing banks, but its request left many questions unanswered, including how much it needs of the $125 billion loan package offered by other European governments. The uncertainty unsettled markets, pushing borrowing costs higher for Spain's government. Spain's stock market plunged 3.7 percent.

"Right now, it's all about Europe, and confidence is pretty low," said Doug Cote, chief market strategist for ING Investment Management. "The policies that they proposing are too little, too late."

The Dow Jones Industrial Average dropped 138.12 points, or 1.1 percent, to close at 12,502.66. The Standard & Poor's 500 index fell 21.30 points, or 1.6 percent, to 1,313.72. The Nasdaq composite lost 56.26 points, or 1.9 percent, to 2,836.16.

Big bank stocks slumped. Many analysts expect banks in Europe and the U.S. to suffer from a freezeup in Europe's financial system if Spain fails to rescue its troubled banks. Spain's banks have been hobbled by loans made during a real-estate bubble, and the government has been inconsistent about how much help it will need to save them.

Bank of America dropped 4 percent, the biggest fall among the 30 stocks in the Dow. BofA's stock lost 34 cents to $7.60. JPMorgan Chase fell 67 cents to $35.32 and Citigroup dropped $1.24 to $26.75.