US stocks slide more than 2 per cent on Europe woes

New York - Major US stock indices dropped more than 2 per cent Friday as concern grew about the Greek debt crisis and a key figure in European banking resigned.

The US market declines followed losses of 4 per cent and more on European markets in Friday trading. The FTSE MIB index lost nearly 5 per cent.

US President Barack Obama's jobs programme unveiled Thursday night appeared to give investors little confidence.

The outlook for Greece was even worse than authorities estimated, as the economy shrank 7.3 per cent in the second quarter.

The figures came as German Finance Minister Wolfgang Schauble said that Greece must fulfil the conditions needed to be a member of the eurozone in order to get another aid package. Greece has avoided bankruptcy only after receiving two successive international bailouts worth a total 220 billion euros.

The chief economist of the European Central Bank (ECB), Juergen Stark of Germany, unexpectedly resigned, throwing financial markets into a spin. Stark was believed to have opposed a controversial decision by the ECB to buy up the bonds of struggling member states.

On Wall Street, the blue-chip Dow Jones Industrial Average dropped 303.68 points, or 2.69 per cent, to 10,992.13. The broader Standard & Poor's 500 Index dropped 31.67 ponts, or 2.67 per cent, to 1,154.23. The technology-heavy Nasdaq Composite shed 61.15 ponts, or 2.42 per cent, to 2,467.99.

The US currency was higher against the euro to 73.23 euro cents from 72.03 euro cents on Thursday. The dollar rose edged up against the Japanese currency to 77.61 yen from 77.51 yen.//DPA