Stocks weighed down by Europe

Associated Press

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 still will need help even after the $90 billion bailout package for Ireland announced 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 many as 163 earlier in the morning, falling to 10,929.28, the lowest level in six weeks.