Wall Street slides on European banking worries

NEW YORK (Reuters) - Wall Street fell on Tuesday after reports on the European banking system reignited concerns about the financial stability of the region.

The European bank stress tests intended to measure the strength of major banks understated holdings in potentially risky government debt, the Wall Street Journal reported.

Separately, Germany's banking association said the country's 10 biggest banks may need 105 billion euros ($134 billion) in new capital as it revamps regulations designed to prevent future crises.

"It certainly is an issue that keeps resurfacing," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. "I'm not sure how deep the concern goes currently, but it's a ready excuse to take some money off the table."

Barclays Plc's U.S.-traded shares dropped 5.3 percent to $19.21, while Deutsche Bank AG's ADRs were down 3 percent to $62.63, and UBS AG ADRs dipped 2.7 percent to $17.55.

U.S. banks were also lower, with Bank of America Corp shedding 1.5 percent to $13.29, and JP Morgan Chase & Co off 1.7 percent to $38.50. The KBW Bank index <.BKX> lost 2.2 percent.

The Dow Jones industrial average <.DJI> dropped 80.15 points, or 0.77 percent, to 10,367.78. The Standard & Poor's 500 Index <.SPX> lost 10.21 points, or 0.92 percent, to 1,094.30. The Nasdaq Composite Index <.IXIC> fell 15.73 points, or 0.70 percent, to 2,218.02.

Wall Street posted its best week in the last two months, lifted by stronger-than-expected economic data that had quelled fears of a double-dip recession.

Oracle Corp , jumped 6.5 percent to $24.42 after the world's third-largest software maker hired Mark Hurd, the former chief at Hewlett-Packard Co , as president. Hurd resigned in August after a probe into sexual harassment allegations.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

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