Dow slides as euro hits 4-year low

NEW YORK - Investors uneasy about the news coming out of Europe on Tuesday went back to selling stocks, sending them sharply lower. The falling euro and news that German regulators plan to limit some kinds of short selling fed the drop.

The Dow Jones industrial average fell 114.88 points after giving up an early gain of 93. The Dow and broader indexes lost more than 1 percent.

The euro gave stocks a boost early in the day when 10 European Union countries sent about $18 billion in bailout money to Greece. The move raised confidence about Europe's ability to prevent its debt crisis from spreading to other economies including the United States.

By afternoon, though, the upbeat mood faded and the euro fell. That sapped the stock market's strength. Treasury prices rose after demand for safer investments increased.

The euro, the currency shared by 16 European nations, has been driving stock trading for weeks as investors interpreted its slide as a sign of continuing economic problems in Europe. It hit a new four-year low of $1.2162 Tuesday afternoon.

Meanwhile, Germany said it was banning "naked" short selling, which occurs when traders bet on a stock or investment that they don't yet own. Naked short selling was cited as one of the factors in world markets' turbulence during the 2008 financial crisis.

The latest step brought reminders of the desperation that U.S. regulators signaled in trying to stabilize the market and underscored a fear that a further drop in the euro will continue to pound world markets.

The Dow fell 1.1 percent to 10,510.95. The Standard & Poor's 500 index fell 16.14, or 1.4 percent, to 1,120.80, while the Nasdaq composite index fell 36.97, or 1.6 percent, to 2,317.26.

Bond prices jumped, driving yields lower. The yield on the benchmark 10-year Treasury note fell to 3.38 percent from 3.50 percent late Monday.

John Merrill, chief investment officer at Tanglewood Wealth Management in Houston, said investors were doing some mental juggling. They see signs that the U.S. economy is strengthening but still have concerns that Europe's problems will undermine the global economy's rebound.

Wal-Mart Stores Inc. was the sole stock among the 30 members of the Dow Jones industrials to rise. The world's largest retailer said its first-quarter earnings rose 10 percent to $3.32 billion. The stock rose 98 cents to $53.71.

But shares of Home Depot Inc. fell even though it posted strong earnings. The home-improvement retailer said it had a $725 million profit in the first quarter compared with $514 million in last year's quarter. Its stock fell 86 cents to $34.73.

Hewlett-Packard Co. said net income jumped 28 percent in its fiscal second quarter to $2.2 billion on stronger demand for computers. The technology company reported the earnings after the markets closed.

More than three stocks fell for every one that rose on the New York Stock Exchange, where volume came to 1.5 billion shares, compared with 1.4 billion Monday.