Stocks dropped as concerns about Latin America's economic recovery eroded investor optimism about second-quarter earnings reports.
The Dow Jones industrial average fell 25.96, to 11,175.02, after rallying from a 114-point drop in early trading. The Dow's loss came after the blue-chip index hit new closing highs in three of the past four sessions.
Broader stock indicators also declined. The Nasdaq composite index fell 12.21, to 2778.23, and the Standard & Poor's 500-stock index slipped 5.54, to 1393.56.
"The good news of the earnings season is being overshadowed by concerns about Latin America," said Marshall Acuff, equity strategist at Salomon Smith Barney.
J.P. Morgan, down 2-5/16 at 138 1/4, and Citigroup, off 1-1/16 at 47-11/16, led the financial services sector lower on worries about its exposure to weak capital markets in Latin America. A strong earnings report wasn't enough to help the brokerage firm Paine Webber as its shares fell 3/8, to 45 1/8.
Several Latin American markets fell sharply Monday after Argentina's presidential candidates hinted at a possible moratorium on repayment of the country's debt. That raised concerns on Wall Street that U.S. financial services companies would suffer losses because of unpaid loans.
But most markets rebounded today. Analysts said the renewed economic uncertainty in Latin America, and the possibility of fallout in the United States, actually could be a blessing to investors because it might prevent the Federal Reserve from raising interest rates later this year.
Some U.S. companies rose on strong earnings reports, including Merrill Lynch, up 1 3/8 at 79 1/4, and the biotech firm Amgen, up 6 at 72-5/16.
Technology stocks were mostly lower. Dell Computer, the most active issue on the Nasdaq market, fell 1 3/8, to 42 1/4.
Procter & Gamble, a Dow stock, rose 1-15/16, to 88-15/16, after it announced a 12 percent increase in its quarterly dividend.
Amazon.com rose 8 3/4, to 126 1/8, after announcing it is adding toys and electronics to its Web site.