NEW YORK - (AP) - Worries about Europe's economic and debt problems sent U.S. stocks Tuesday to their first loss in four days.
The major indexes bounced up and down in another volatile day.The Dow Jones industrial average fell more than 120 points in thefirst half hour of trading after a report showed that Germany'seconomy stalled last quarter and dragged down growth for Europe.
The Dow recovered and had a slight advance at midday, butresumed its drop after the leaders of France and Germany tried tocalm worries about Europe's debt problems by pushing for long-termpolitical solutions. Investors were hoping for immediate financialmeasures like the introduction of a single bond jointly backed bythe eurozone's members. The Dow fell as many as 190 points in theearly afternoon before again recovering.
At the close, the Dow was down 76.97, or 0.7 percent, to11,405.93. It was the first time in seven trading days that the Dowrose or fell by less than 100 points. The Standard & Poor's 500index fell 11.73, or 1 percent, to 1,192.76. The Nasdaq compositefell 31.75, or 1.2 percent, to 2,523.45.
"The real question the market is trying to answer is: Are wegoing to have another recession or not?" said John Burke, head ofBurke Financial Strategies with $200 million in assets undermanagement. "Today, the answer is maybe yes, because it doesn'tlook like Europe has figured out a solution to its debt."A proposal for a Europe-wide tax on financial transactions alsohurt stocks, said Nick Kalivas, vice president at broker MF Global."It's another slap in the face to the banking system" and wouldcut into profits and limit trading, he said. "The path towardeconomic growth still looks pretty uncertain."
In the U.S., economic reports Tuesday were mixed: Housingremains weak, but factory output rose last month at its fastestpace since an earthquake in Japan disrupted global manufacturing inMarch.