Stocks mostly drop after bailout of Spanish bank adds to concern about Europe’s finances

Stocks mostly fall on new worries about Europe

NEW YORK — A jump in April home sales is doing little to ease concerns in the stock market about the strength of Europe’s economy.

Stocks are mostly falling Monday following a weekend bailout of a regional bank in Spain. The move brought new concerns that the European Union’s financial system is in trouble.

The National Association of Realtors says sales of previously owned homes rose 7.6 percent to an annual rate of 5.77 million. That is the best showing in five months and ahead of expectations. Buyers were rushing to meet a deadline for a tax credit.

In morning trading, the Dow Jones industrials are down 64 at 10,130. The Standard & Poor’s 500 index is down 5 at 1,082.77. The Nasdaq composite index is up 1 at 2,230.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stocks fell Monday on further concerns about the strength of Europe’s financial industry and economy.

The drop comes after a tumultuous week that saw major U.S. indexes post their biggest one-day losses of the year on Thursday and then stage a partial rebound Friday. Major indexes have been hit hard in recent weeks on worries about European sovereign debt problems.

Major European indexes mostly fell Monday following a bailout over the weekend of a regional bank in Spain, one of the countries already dealing with ballooning deficits. The Bank of Spain stepped in to rescue Cajasur after it failed to complete a merger. It was only the second time Spain’s central bank stepped in to bail out a regional lender.

The euro fell against the dollar, dropping to $1.2359. The euro has become a symbol of investors’ concern about the continent’s economy in recent weeks. Traders have been dumping the euro on fears that massive debts will cause a default by a weaker country in the European Union. The euro hit a four-year low last week.

There is uncertainty about whether countries like Greece, Spain and Portugal will be able to contain mounting debt through steep spending cuts. And, investors are also worried that those budget cuts will upend an economic recovery in Europe and slow a worldwide rebound.

Investors brushed off gains in Asia, where China’s president said the country will loosen its currency policy and adjust the exchange rate for the yuan. No timetable was given, however.

In the first hour of trading, the Dow Jones industrial average fell 80.34, or 0.8 percent, to 10,113.05. The broader Standard & Poor’s 500 index fell 6.82, or 0.6 percent, to 1,080.87, and the Nasdaq composite index fell 4.93, or 0.2 percent, to 2,224.11.