NEW YORK – NEW YORK (AP) — Stocks had another wild day, but there was no big event, no surprise announcement behind the swings.
All that happened was that the euro, battered to a four-year low Monday before trading began in the U.S., started rising again. And the stock market followed the currency shared by 16 European nations.
Shortly after noon Eastern time, the Dow Jones industrials were down 184 points. It looked like they would add to the pile of triple-digit losses they've suffered over the past two weeks as investors worried that Europe's economic problems would spread to the U.S.
But the euro, which seesawed after earlier falling to $1.2237, finally started its move higher — a bumpy move, but an upward one nonetheless. The Dow also racheted higher, finally ending with an almost six-point advance.
Investors are looking at the euro as an indicator of confidence in the European economies. The euro has been sliding on concerns that debt problems will undermine Europe's recovery, and in turn that of the U.S. And so, when it started rising Monday, stock traders interpreted its move as a "buy" sign.
But given stocks' erratic moves over the past few weeks, it's likely that there will be more days like Monday ahead. Traders still have many unanswered questions about how Europe will pull itself from its financial mess without hurting its recovery. Because economies around the world are dependent on one another, the broader concern is that Europe's problems will halt a rebound elsewhere.
Other investments seen as risky had a rough time Monday. Oil traded below $70 a barrel for the first time since February but finished above that psychological benchmark. Oil is priced in dollars so a stronger dollar discourages investors from buying oil. Crude fell $1.45 to $70.16 per barrel on the New York Mercantile Exchange.
Energy stocks, which make up about 10 percent of the Standard & Poor's 500 index, dropped after oil fell. Shares of consumer staples companies, which are seen as safer bets in weak economies, rose.
Peabody Energy Corp. fell 5.3 percent. Procter & Gamble Co., which makes Tide detergent and Gillette razors, rose 1.3 percent.
Investors are questioning whether steep budget cuts in countries including Greece, Spain and Portugal will hinder an economic recovery in Europe and in turn, the U.S. The fear is that the world banking system could see a replay of the losses that hobbled financial institutions in late 2008.
The austerity measures are required under a nearly $1 trillion bailout program the European Union and International Monetary Fund agreed to last week. The rescue package provides access to cheap loans for European countries facing mounting debt problems.
Traders are betting that U.S. export growth will continue to slow as Europeans, unnerved by problems at home, show less of an appetite to buy American goods. And if Americans get nervous and spend less on imports that could further curtail the global recovery.
"We need to quantify how much Europe can hurt us," said Philip Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis. He said it could take a month or two before investors have a better sense of whether the debt problems in Europe will spread.
The Dow rose 5.67, or 0.1 percent, to 10,625.83. The Standard & Poor's 500 index rose 1.26, or 0.1 percent, to 1,136.94, while the Nasdaq composite index rose 7.38, or 0.3 percent, to 2,354.23.
Three stocks fell for every two that rose on the New York Stock Exchange, where consolidated volume came to 5.93 billion shares, compared with 6.01 billion Friday.
Bond prices fell after steep gains last week. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.50 percent from 3.46 percent late Friday.
Gold fell 50 cents to $1,227.30 an ounce.
Europe's debt crisis poses risks to the U.S. financial system because it could make loans even harder to come by in the United States and push up the rates on them. European banks own bonds of overextended governments at the heart of the crisis. And, there are fears that those banks could suffer heavy losses — or worse, collapse — if they aren't repaid. If that happens, U.S. banks that lend to those European banks would suffer losses, too. That would make U.S. banks cut back on lending, which would hurt the economic recovery.
Fears about such losses makes lending more risky. That's prompting banks and other investors to demand a higher return when they lend to one another — as well as to some businesses and people — on a short-term basis. That's why an interest rate called the LIBOR is rising. That rate is used to peg many adjustable rate mortgages and business loans in the United States.
Analysts say that even a loss in confidence could make it harder for the U.S. economy to bounce back.
"In all likelihood our recovery is going to continue but it will be at a slower pace than we imagined a month ago," said Howard Ward, chief investment officer of the GAMCO Growth Fund.
A forecast from home-improvement retailer Lowe's Cos. hurt sentiment. The stock fell 81 cents, or 3.1 percent, to $25.26.
Peabody Energy fell $2.20 to $39.61, while Procter & Gamble rose 84 cents to $63.38.
The Russell 2000 index of smaller companies rose 1.73, or 0.3 percent, to 695.71.
Britain's FTSE 100 fell 0.1 percent, Germany's DAX index gained 0.1 percent, and France's CAC-40 fell 0.5 percent. Japan's Nikkei stock average fell 2.2 percent.
In China, the benchmark index in Shanghai fell 5.1 percent to a one-year low on concern that the government will curb lending to slow the economy. There also was concern about the problems in Europe.
AP Economics Writer Jeannine Aversa contributed to this story from Washington.