LONDON - Stocks mostly fell Monday as another slump in the euro prolonged concerns about Europe's economy.
Major European indexes mostly fell following a bailout over the weekend of a regional bank in Spain, one of the countries already dealing with ballooning deficits. The Bank of Spain stepped in to rescue Cajasur after it failed to complete a merger. It was only the second time Spain's central bank stepped in to bail out a regional lender.
The euro fell against the dollar, dropping to $1.2367. The euro has become a symbol of investors' concern about the continent's economy in recent weeks. Traders have been dumping the euro on fears that massive debts will cause a default by a weaker country in the European Union. The euro hit a four-year low last week.
There is uncertainty about whether countries like Greece, Spain and Portugal will be able to contain mounting debt through steep spending cuts. And, investors are also worried that those budget cuts will upend an economic recovery in Europe and slow a worldwide rebound.
The drop comes after a tumultuous week. Major U.S. indexes posted their biggest one-day losses of the year on Thursday and partially rebounded Friday. Stocks have been hit hard in recent weeks on worries about European sovereign debt problems.
Investors brushed off gains in Asia, where China's president said the country will loosen its currency policy and adjust the exchange rate for the yuan. No timetable was given, however.
There was welcome news about the economy. The National Association of Realtors sais sales of previously owned homes rose 7.6 percent to an annual rate of 5.77 million. That is the best showing in five months and ahead of expectations. Buyers were rushing to meet a deadline for a tax credit.
In midmorning trading, the Dow Jones industrial average fell 42.40, or 0.4 percent, to 10,150.99. The broader Standard & Poor's 500 index fell 3.45, or 0.3 percent, to 1,084.24, and the Nasdaq composite index rose 5.99, or 0.3 percent, to 2,235.03.
