Socks cut losses on Monday as the euro gained ground against the U.S. dollar, reflecting reduced worries after calls for Portugal to seek a rescue from its debt crisis.
Sentiment was dampened as pressure mounted for Lisbon to seek an international bailout soon, but losses were capped as investors focused on merger activity in the United States and financial results for the fourth quarter.
Stocks have been helped by some strong economic data heading into the earnings season, leading to six straight week of gains by the Dow and the S&P.
At least today, the strength in the market has allowed investors to shrug off concerns about European debt, said Michael James, senior trader at Wedbush Morgan in Los Angeles. The (equities) market remains in a pretty solid uptrend.
Aluminum company Alcoa Inc
The euro, seen as a proxy for investors' risk appetite, gained 0.6 percent against the U.S. dollar, recovering from a four-month low.
The Dow Jones industrial average <.DJI> dropped 39.02 points, or 0.33 percent, to 11,635.74. The Standard & Poor's 500 Index <.SPX> dipped 2.06 points, or 0.16 percent, to 1,269.44. The Nasdaq Composite Index <.IXIC> gained 2.25 points, or 0.08 percent, to 2,705.42.
Merger deals announced on Monday included Duke Energy Corp
Shares of Progress slid 2.2 percent to $43.75, and Duke fell 1.6 percent to $17.50. DuPont, a Dow component, fell 1.9 percent to $48.81.
In company news, LDK Solar Co Ltd
Shares of AT&T Inc
Education stocks slipped after Strayer Education Inc
Strayer shares plunged 22.8 percent to $118.35. Corinthian Colleges Inc
The benchmark S&P 500 was on track for its first three-day string of losses since late November. Still, it found support near its 14-day moving average, now near 1,264.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)