LITTLE ROCK — U.S. stocks fell Monday as fears about Europe overshadowed recent excitement about central banks’ efforts to elevate the market.
An index of business confidence in Germany, the biggest economy in Europe, fell for a fifth-straight month. Many economists had expected it to at least remain flat. Some think Germany is headed for a recession.
The threat of the years old European debt crisis has seemed less immediate in recent weeks as central banks unveiled measures aimed at encouraging investment and helping the global economy. The German report reignited those fears.
Stocks had risen strongly in recent weeks as traders anticipated, then received, help from the Federal Reserve in the form of an open-ended bond-buying program. The Fed will buy $40 billion of mortgage bonds per month until the economy has improved.
“It’s not unusual after big moves for the market to, in essence, go quiet and wait for the next catalyst,” said Quincy Krosby, market strategist with Prudential Financial. The next catalyst, Krosby said, is third-quarter earnings, which companies will begin to announce next month.
The Dow Jones industrial average closed down 20.55 points, or 0.2 percent, at 13,558.92. The Standard & Poor’s 500 index declined 3.26, or 0.2 percent, to 1,459.89. Its two strongest groups were utilities and telecommunications, safer stocks that tend to do well in a weaker economy.
The Nasdaq composite index dropped 19.18 points, or 0.6 percent, to 3,160.78. The Nasdaq, heavy in technology shares, was dragged lower as Apple shares fell on news that sales of the new iPhone 5 missed analysts’ targets.
Declining stocks outnumbered advancers by about 3-to-2. Consolidated volume was just under 3 billion shares.
In the U.S., stocks have gone from under priced to fairly priced, said Doug Cote, chief market strategist at ING Investment Management. If recent weakness in U.S. manufacturing is any guide, he said, traders will be disappointed next month by companies’ quarterly results.
Cote said China’s abrupt economic slowdown is adding to corporate America’s woes.
In the U.S., traders are looking for more good news from the housing market, which appears to be bouncing back after being a stuck in a rut for years. The latest data on new and pending home sales will be released later in the week.
United Health Group was down slightly on its first day in the Dow, which shuffled its lineup of stocks to reflect health care’s growing importance in the economy. United Health, the nation’s largest health insurer, replaces Kraft Foods in the Dow. Its stock fell 20 cents, or 0.4 percent, to $55.98.
Peregrine Pharmaceuticals Inc. stock collapsed after the cancer drug developer told analysts they should not rely on recently disclosed data about its lead product, a proposed lung cancer treatment. The stock fell $4.23, or 78.5 percent, to $1.16.
Benchmark crude oil fell 96 cents, or 1 percent, to settle at $91.93 per barrel on the New York Mercantile Exchange on concerns about weakening global growth and demand for crude.
Business, Pages 22 on 09/25/2012