NEW YORK - A drop in the euro set off a late-day slide in stocks Wednesday and sent the Dow Jones industrial average to its first close below 10,000 in nearly four months.

The Dow, up 135 points in afternoon trading, ended down 69.30. It was the eighth drop for the Dow in the last 10 trading days.

Wednesday's trading extended the streak of volatility the market has endured since major indexes hit their highs for the year in late April.

Stocks' reversal underscored how jittery traders are about Europe. They are worried that heavy debt loads in countries such as Spain, Portugal, and Italy and rounds of cost-cutting will hamper a recovery of the global economy.

"The market is fragile," said Eric Teal, chief investment officer at First Citizens BancShares Inc., of Raleigh, N.C. "Europe will continue to weigh on investors' perception. The U.S. economy is on solid footing . . . but there are still too many uncertainties about Europe."

The euro, which is used by 16 European countries, pulled major stock indexes lower after it began to slide again. The currency has become a symbol of investor lack of confidence in Europe's ability to contain its debt problems. The euro remains close to the four-year low it hit last week. It fell to $1.2179 Wednesday.

Stocks also were hurt by reports that China may review its investments in European government bonds. That spurred concern the credit crisis will worsen.

Microsoft Corp. shares tumbled $1.06, or 4.07 percent, to $25.01 after chief executive officer Steve Ballmer said the effects of the debt crisis would not be isolated to Europe. Financial shares in the Standard & Poor's 500 reversed a rally when the Financial Times said Chinese officials had met with foreign bankers to discuss holdings of European debt.

The Dow industrials fell 0.69 percent to 9,974.45. It was the first close below 10,000 since Feb. 8, when the Dow finished at 9,908.39.

The broader Standard & Poor's 500 index fell 6.08, or 0.57 percent, to 1,067.95. The Nasdaq composite index closed down 15.07, or 0.68 percent, at 2,195.88.

About two stocks rose for every one that fell on the New York Stock Exchange. Volume came to 1.9 billion shares, in line with Tuesday.

Among individual stocks, shares of Toll Bros. Inc. were up 17 cents at $20.78. The Horsham, Pa., home builder posted a smaller quarterly loss and the contracts and value of its backlog grew for the first time in two years.

US Airways Group Inc. shares were up 64 cents at $8.45. Its shares hit a 16-month high a day after a JPMorgan Chase & Co. analyst upgraded the airline on its lack of fuel hedges and scant European exposure.