Stocks close sharply lower on fears that Europe’s debt crisis could spread to Italy and Spain

NEW YORK — Stocks are closing at their lowest level so far in July on fresh fears that Europe’s debt crisis will spread beyond Greece to much larger economies.

Italy, Europe’s third-largest economy, and Spain, its fourth-largest, could be sliding toward default.

The Dow Jones industrial average lost 151 points, or 1.2 percent, to close at 12,506 Monday. The Standard & Poor’s 500 index fell 24, or 1.8 percent, to 1,319. The Nasdaq composite fell 57, or 2 percent, to 2,803.

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