US stocks fall on euro crisis fears, despite pact

A warning that Moody's Investors Service will review all the credit ratings of all European nations doused investors' optimism about last week's fiscal pact and sent stocks and other risky assets plunging today.

The Dow Jones industrial average dove 222 points in midday trading. The euro fell more than 1 percent against the dollar and the yields on Italian government bonds rose sharply as investors became more nervous about that nation's debt burden. European stock indexes closed sharply lower.

Moody's said last week's summit of European leaders produced "few new measures" and that Europe remains in a "critical and volatile stage."

The region remains "prone to further shocks and the cohesion of the euro under continued threat," Moody's said. As a result, the agency will review the creditworthiness of all European countries in the first three months of 2012.

Moody's noted that the pact does not address Europe's immediate problem: the crushing debt loads of some nations and their rising borrowing costs.