NEW YORK - Stocks faltered in the last hour of trading Monday after investors gave in to anxiety about Europe's economy.

The Dow Jones industrial average erased an early gain of 118 points to end down 20. The Standard & Poor's 500 also fell slightly, while the Nasdaq composite rose less than a point.

Stocks began the day higher after a report that industrial production in the 16 countries that use the euro grew more than expected in April. That boosted confidence that Europe could solve its debt problems and pushed the euro above $1.22 for the first time since June 4.

Greece is still enough of a concern that bad news about the country's problems was enough to help take down the market's advance. Traders at first shrugged off news that credit rating agency Moody's lowered its rating on Greece's debt to "junk" status. But in the final hour, many traders apparently decided the safest move was to take money out of the market.

Bank stocks fell on concerns about European debt and about a financial overhaul bill in Congress. Some traders worry that the merged version of the House and Senate bills will be tougher on banks than analysts had anticipated. JPMorgan Chase & Co. fell 2 percent, while Goldman Sachs Group Inc. lost 1.6 percent.

Dan Wantrobski, director of technical research at Janney Montgomery Scott in Philadelphia, expects the markets to be choppy for some time.

"The longer we wait here in this kind of purgatory, the more the likelihood we can break through," he said, referring to another drop in the markets.

The Dow fell 20.18, or 0.2 percent, to 10,190.89. The S&P 500 index fell 1.97, or 0.2 percent, to 1,089.63, while the Nasdaq composite index rose 0.36, or less than 0.1 percent, to 2,243.96.

JPMorgan fell 76 cents, or 2 percent, to $37.33. Goldman fell $2.20, or 1.6 percent, to $133.44.

Shares of BP P.L.C. and Transocean Ltd. fell because of the fallout from the Gulf of Mexico oil spill. BP dropped $3.30, or 9.7 percent, to $30.67 on concerns that the company would suspend its dividend to ease U.S. political pressure. Transocean Ltd., owner of the rig that exploded, fell $2.07, or 4.4 percent, to $44.78.

The Russell 2000 index of smaller companies rose 3.27, or 0.5 percent, to 652.27.

Britain's FTSE 100 rose 0.7 percent, Germany's DAX index gained 1.3 percent, and France's CAC-40 rose 2 percent. Japan's Nikkei stock average rose 1.8 percent.