European woes weigh down US stocks

NEW YORK (AP) — 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 but recovered much of its losses late in the day.

The Dow Jones industrial average fell 39.51 points, or 0.4 percent, to close at 11,052.49. It had been down as many as 163 earlier.

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.

The euro fell to a two-month low as investors flocked to the safety of the dollar and US Treasurys. Gold prices also rose.

Investors are worried that other weak European countries like 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.”

Holiday retail sales also got off to a good start in the post-Thanksgiving weekend. The National Retail Federation, a trade group, estimated that 212 million shoppers visited stores and websites during the first weekend of the holiday season, up from 195 million last year.

Online spending rose more than 14 percent from Thanksgiving Day through Saturday, according to IBM’s Coremetrics. Shares of online retailer Amazon.com rose 1.3 percent on expectations that shoppers were returning on what is known as “Cyber Monday,” when retailers offer deals to lure people to buy items online while at work.

A fuller picture on spending will come Thursday when retailers report November sales. Investors have been hoping that consumers, who have generally been spending cautiously since the recession, would feel more comfortable about shopping during the holidays.