NEW YORK — Stocks faltered in the last hour of trading Monday after investors gave in to anxiety about Europe’s economy.
The Dow Jones industrial average erased an early gain of 118 points to end down 20. The Standard & Poor’s 500 also fell slightly, while the Nasdaq composite rose less than a point.
Stocks began the day higher after a report that industrial production in the 16 countries using the euro grew more than expected in April. That boosted confidence Europe could solve its debt problems and pushed the euro above $1.22 for the first time since June 4.
Investors have been concerned that government spending cuts aimed at slashing debt would hurt Europe and slow a global recovery. But there have been few signs so far that the budget cuts needed to contain rising debt in countries such as Greece and Spain have slowed economies around the world.
Greece is still enough of a concern that more bad news about the country was enough to help take down the market’s advance. Traders at first shrugged off news that credit-rating agency Moody’s lowered its rating on Greece’s debt to “junk” status. But in the final hour, many traders apparently decided the safest move was to take money out of the market. The downgrade wasn’t the first, and analysts said the market’s response signals traders are still jittery about Europe.
“When you have ratings downgrades, it’s the proverbial fire truck arriving at the barn after it has burned down,” said Kent Engelke, chief economic strategist at Capitol Securities Management in Glen Allen, Va.
The Dow fell 20.18, or 0.2 percent, to 10,190.89. The S&P 500 index fell 1.97, or 0.2 percent, to 1,089.63, while the Nasdaq composite index rose 0.36, or less than 0.1 percent, to 2,243.96.
The market is coming off its best week since mid-February. The Dow rose 2.8 percent last week to end a three-week losing streak. But the gains didn’t come from a steady climb; stocks sold off or rallied during the final hours of trading each day.
