Stocks slightly lower at open as concerns about foreign debt offset weaker dollar

Stocks dip at open even as dollar falls

NEW YORK — Concerns about foreign debt problems tripped up the stock market for a second day in a row, sending shares down in early trading even as the dollar resumed its decline.

The dip in stocks followed a sharp sell-off Tuesday that carried over into Asia overnight as concerns about foreign debt loads escalated and Japan said its economy grew at a lower rate than originally expected in the third quarter.

A weaker dollar, however, helped put some support under stocks. The dollar retreated after rising the day before to its highest level against the euro since early November.

The dollar has fallen steadily since March as investors take advantage of cheap financing to invest in riskier, higher-yielding assets like stocks and commodities. But in recent weeks, investors have been shuttling between stocks and the dollar as they try to determine the strength of the economic recovery and where they will be able to make the biggest returns.

While investors want to see the economy grow, they also know that the Federal Reserve could raise interest rates and remove its stimulus measures once the economy appears to be on solid footing. Higher rates could make stocks look less appealing as returns for other investments improve, potentially upsetting a nine-month advance in stocks that has lifted the Standard & Poor’s 500 index up 61.4 percent.

On Tuesday, investors bought safe havens like the dollar and Treasurys and sold stocks after Moody’s Investor Service, a major rating agency, warned that the U.S. and Britain are at risk of having their ratings downgraded if they don’t get their public finances under control. Fitch, another ratings agency, downgraded its rating on Greece.

Foreign debt problems and a potential downgrade to the U.S. triple-A credit rating could make it much more difficult for the government to finance its stimulus programs and put the nascent economic recovery in jeopardy. The Dow Jones industrial average fell 104 points Tuesday.

In early trading, the Dow Jones industrial average fell 31.44, or 0.3 percent, to 10,254.53. The Standard & Poor’s 500 index fell 4.77, or 0.4 percent, to 1,087.17, while the Nasdaq composite index fell 13.67, or 0.6 percent, to 2,159.32.