NEW YORK, Dec 7: US stocks fell on Wednesday after Germany signalled diminished expectations for a crucial EU summit to address the eurozone debt crisis.

The Dow Jones Industrial Average dropped 65.32 points (0.54 per cent) to 12,084.81 in the first five minutes of trade.

The tech-rich Nasdaq Composite tumbled 22.11 points (0.83 per cent) to 2,627.45, while the broader S&P 500-stock index shed 9.35 points (0.74 per cent) to 1,249.12.

Markets were on tenterhooks for the start of the two-day European Union summit on Thursday, with speculation rising that leaders would forge a substantial agreement to contain the spreading debt crisis.

However, a German government source, speaking on Wednesday on condition of anonymity, dampened hopes for a deal, saying he had become “more pessimistic” in recent weeks for a “total agreement” at the Brussels summit.

“The last grand solution from the EU summit in late October, which produced a framework for a leveraged EFSF and a provision for a ‘voluntary’ 50 per cent haircut for private holders of Greek debt, didn’t exactly produce much functional relief. On the contrary, things only got worse,” said Patrick O’Hare.

“That is why the world is waiting on the outcome of yet another ‘make or break’ summit this week.”—AFP