Stocks mostly fell on Monday as a Spanish government bailout of a local bank refocused attention on Europe's debt crisis, although positive broker comments on some big-cap technology companies boosted the Nasdaq.
The Bank of Spain took over Spanish savings bank CajaSur over the weekend after a failed merger. Although a small bank, investors feared the move may be a sign of more problems in Europe's banking system at a time when much of the region is struggling with massive public deficits.
There's still a lot of questions unanswered about the whole situation, and it's really just going to take time, said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. Will they be able to pull it off? Who else is in trouble?
The Nasdaq rose after Morgan Stanley raised its price target on Apple Inc to $310, boosting its shares 3 percent, while Google Inc rose 2.1 percent after Citigroup added it to its top picks list.
The Dow Jones industrial average <.DJI> dropped 40.89 points, or 0.40 percent, to 10,152.50. The Standard & Poor's 500 Index <.SPX> fell 2.27 points, or 0.21 percent, to 1,085.42. The Nasdaq Composite Index <.IXIC> gained 5.75 points, or 0.26 percent, to 2,234.79.
Citigroup shares rose 3.2 percent to $3.87 after Goldman upgraded the stock to buy from neutral, although that was countered by a downgrade for Well Fargo & Co to neutral from buy, which sent its shares down 3.8 percent to $28.95.
Campbell Soup Co posted a better-than-expected profit on higher sales in its key U.S. soup market, helped by increased promotional spending, and forecast full-year earnings at the high end of its target. The shares fell almost 1 percent to $35.14.
Homebuilders rose after sales of previously owned U.S. homes rose more than expected in April to a five-month high, reflecting a last minute dash by buyers to close contracts before the expiration of a home buyer tax credit. The Dow Jones home construction index gained 0.6 percent.
(Editing by Padraic Cassidy)