NEW YORK — Stocks ended lower Monday on lingering fears that Europe’s debt crisis will continue to spread even after Ireland gets bailed out. The Dow Jones industrial average dipped below 11,000 earlier but recovered much of its losses late in the day.
The euro fell to a two-month low as investors flocked to the safety of the dollar and U.S. Treasurys. Gold prices also rose.
Investors are worried that other weak European countries such as Portugal and Spain will still need help even after the $90 billion bailout package for Ireland announced on Sunday.
Some of those worries faded late in the day as traders shifted their focus to positive economic news. The Federal Reserve Banks of Dallas and Chicago both reported higher manufacturing activity in their areas.
“The fundamentals are improving, and there are several indications that the economy is picking up a little bit of steam here,” said Peter Cardillo, chief market economist at Avalon Partners, a New York brokerage house. “There’s a slew of numbers that are coming out later this week and the market is preparing for that.”
The Dow Jones industrial average fell 39.51 points, or 0.4 percent, to close at 11,052.49. It had been down as much as 163 earlier in the morning, falling to 10,929.28, the lowest level in six weeks.
The Standard & Poor’s 500 index edged down 1.64, or 0.1 percent, to 1,187.76. The technology-heavy Nasdaq composite index dropped 9.34, or 0.4 percent, to 2,525.22.
Dick Bove, a banking analyst at Rochdale Securities, said investors realized that some U.S. banks had little exposure to European debt issues. He added that if European banks are subject to more stringent capital requirements, U.S. banks could benefit.
“When people sit down and think about the situation in Europe, it is clear that the American banks emerge in a much stronger position,” he said.
Investors were also cautious as they awaited the week’s economic reports, including the government’s monthly employment report, due Friday. Also due this week are the Conference Board’s survey of consumer confidence today, and the Institute for Supply Management’s assessments of the manufacturing and services industries.
