NEW YORK Signs of a slowdown in the U.S. economic recovery pulled stocks and oil prices lower on Monday, while optimism that officials will provide more clarity about navigating a way out of the euro zone debt crisis lifted the euro.
U.S. crude futures fell 2.3 percent and gasoline futures tumbled 5 percent to hit a nine-week low as concerns mounted about energy demand and the economy.
A sense of "declining economic activity and a negative impact on demand outlook" were dragging energy prices lower said John Kilduff, a hedge fund manager at Again Capital LLC in New York.
The S&P 500 was pulled lower by declines in technology and consumer discretionary shares as the strength of the recovery was questioned. Recent price action, including the lowest close for the S&P 500 in almost a month and below a key technical support level, portends further market weakness, some analysts say. For details, see .N
World stocks as measured by MSCI .MIWD00000PUS fell 0.67 percent.
The euro rose against the dollar as a European Union meeting showed support for debt-burdened countries. German Chancellor Angela Merkel said the restructuring of the debt of any euro zone country before 2013 would be "incredibly" damaging to the credibility of the euro zone, easing worries about Greece.
"I expect the European finance ministers to show solidarity and support for Greece, especially after Merkel," said Richard Franulovich, senior currency strategist at Westpac in New York. He noted that kind of support should put a floor under the euro for now.
Euro zone finance ministers approved a 78 billion euro bailout for Portugal but as a condition of the deal insisted that Lisbon ask private bondholders to maintain their exposure to its debt.
The weekend arrest in New York of International Monetary Fund Managing Director Dominique Strauss-Kahn on charges of attempted rape sent shock waves through French political circles and left the IMF in turmoil.
The single currency rose 0.5 percent to above $1.417 after earlier falling as far as $1.4048 on trading platform EBS, its lowest since March 30. It had hit a 17-month peak of $1.4940 less than two weeks ago.
U.S. crude oil futures extended this month's slump to about 15 percent as concern mounted about energy demand and the economy.
Crude futures settled down $2.28 at $97.37 a barrel. June Brent fell to an intraday low of $112.00, before bouncing back to $112.87, down 1 percent for the day.
On Wall Street, the Nasdaq sank, leading U.S. stocks lower as investors sold recent winners in a sign of growing unease with pockets of U.S. economic weakness.
The S&P retail index .RLX fell 2 percent.
"We have had some data that has been softening, so I guess we are going to experience a bit of a slowdown," said Frank Lesh, an analyst and broker at FuturePath Trading in Chicago.
A gauge of manufacturing in New York State tumbled in May to its lowest level in five months, the New York Federal Reserve said.
The Dow Jones industrial average .DJI lost 47.38 points, or 0.38 percent, to 12,548.37. The Standard & Poor's 500 Index .SPX fell 8.30 points, or 0.62 percent, to 1,329.47. The Nasdaq Composite Index .IXIC dropped 46.16 points, or 1.63 percent, to 2,782.31.
Copper edged up supported by the euro, but lingering worries over economic growth capped gains. Benchmark copper traded at $8,839.25 a ton from $8,788 at the close on Friday.
Gold held steady. Spot gold was bid at $1,490.55 an ounce at 2020 GMT, slipping from $1,493.25 late in New York on Friday. U.S. gold futures were down 0.2 percent at $1,490.10 an ounce.