NEW YORK — The first week of July is off to a much slower start than the last week of June, when stocks had their biggest gains in two years.
Major indexes were mixed for much of the day Tuesday but dipped in afternoon trading after Moody’s downgraded Portugal’s debt to “junk.” The credit-rating agency cited concerns that Portugal will not be able to meet targets to reduce its deficit because of the “formidable challenges” the country faces in cutting spending.
The Dow Jones industrial average fell 12.90, or 0.1 percent, to close at 12,569.87. The Dow had risen as many as 19 points in morning trading after the Commerce Department reported an increase in orders for manufactured goods.
The Standard & Poor’s 500 fell 1.79, or 0.1 percent, to 1,337.88. The Nasdaq composite rose 9.74, or 0.3 percent, to 2,825.77.
Investors have been worried that Europe’s debt problems could slow the global economy and cause a crisis for European banks.
“The European debt crisis is going to be with us for a while,” said David Kelly, chief market strategist at J.P. Morgan Funds. “There still is a very big issue out there.”
Trading volume was light as many traders took vacations. U.S. markets were closed Monday for the July Fourth holiday. Many investors are looking ahead to next week, when aluminum maker Alcoa becomes the first major U.S. company to report financial results.
Last week the Dow rose 648 points, its best week in two years. The gains erased nearly six weeks of losses.
With last week’s rally, the Dow is down 1.8 percent from April 29, when it reached a three-year high. The Dow is up 8.6 percent for the year. The S&P 500 index is up 6.4 percent, and the Nasdaq composite is up 6.5 percent.
Analysts are optimistic about the corporate earnings reports that will start to come in next week. Earnings from companies in the S&P 500 are expected to rise 14 percent from the same period a year ago, according to FactSet. Revenue is expected to rise 11 percent.
“There hasn’t yet really been a reason to get concerned about corporate America,” said Randy Warren, chief investment officer of Warren Financial Service. “It’s the rest of America that’s struggling.”
