* Euro zone debt fears hit euro for 3rd day
* Stocks slip, while US bond prices rise
* Oil hit by demand concerns
(Updates with U.S. stock opening, changes dateline, previous LONDON)
NEW YORK, July 12 (Reuters) - Investors dumped the euro and stocks for a third day on Tuesday as concern mounted that the euro zone debt crisis was spreading to Italy and Spain, while U.S. bond prices rose.
The crisis has kept investors worried about its potential effect on the global economy, especially as the U.S. recovery has struggled to pick up speed.
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised Monday cheaper loans, longer maturities and a more flexible rescue fund. For details, see [ID:nL6E7IB1PQ]
But markets came under pressure as they set no deadline, and Dutch Finance Minister said a selective default for Greece was no longer being excluded. [ID:nB5E7I401K]
"Italy has moved very, very quickly to catch up with Spanish yields, and the market has woken up to the fact that there's a much larger problem. That's what precipitated the large fall (in the euro)," said Adam Myers, senior FX strategist at Credit Agricole CIB
The pan-European FTSEurofirst 300 <.FTEU3> was down 0.8 percent, but off its session lows, while Japan's Nikkei stock index ended lower for a third day, closing off 1.4 percent, and U.S. stocks opened lower also before finding some stability.
The Dow Jones industrial average <.DJI> was up 1.67 points, or 0.01 percent, at 12,507.43 about half an hour after the open. The Standard & Poor's 500 Index <.SPX> was down 1.94 points, or 0.15 percent, at 1,317.55. The Nasdaq Composite Index <.IXIC> was down 13.67 points, or 0.49 percent, at 2,788.95.
In the foreign exchange market, the euro
The euro zone concerns helped lift bond prices, as investors sought safer assets. The benchmark 10-year U.S. Treasury note was up 10/32, its yield at 2.8879 percent.
"Treasuries remain at the mercy of headlines from Europe and the broader implications for the euro," said David Ader, head of government bond strategy at CRT Capital in Stamford, Connecticut.
There was some respite for Italian assets after speculation swirled that the European central bank was buying Italian and Spanish paper, even though traders who usually see those transactions said they had seen no evidence of such trades.
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Eurozone pledges new steps to help Greece: [ID:nL6E7IB1PQ]
Italy dragged into eurozone crisis: [ID:nLDE76A0EA]
Graphic on sovereign credit ratings:
http://r.reuters.com/vyc22s
BOJ holds fire, more optimistic on economy:[ID:nL3E7IC00Q]
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The costs of insuring against a default by the euro zone's peripheral issuers hit record highs, and Italian and Spanish bond yields spiked higher. [GVD/EUR]
Brent crude oil futures fell $1.39 to $115.85 on fears
about slowing energy demand.