Stocks reversed an early gain on Wall Street Monday as traders returned to worrying about the European economy. Optimism about a deal to prevent financial collapse in Cyprus had briefly pushed the Standard & Poor's 500 index to within a half-point of its record closing high, but the indexes soon turned negative, scuttling a rally in Europe.
The S&P 500 was down 0.4 percent just before 1 p.m. Eastern time. The Dow Jones industrial average fell 0.6 percent, and the Nasdaq composite average slipped 0.5 percent.
Wall Street had opened higher, following markets in Europe and Asia. Traders were relieved that international lenders agreed early Monday to release 10 billion euros ($13 billion) of emergency rescue funds for Cyprus. The European Central Bank will continue to support the nation's foundering banks. In exchange, Cyprus will shrink its banking industry, cut its budget, implement economic reforms and privatize some state assets. The measures will result in heavy losses for its banks' bondholders and people with large deposits in bank accounts.
The deal to save Cyprus' banks erased a source of anxiety for investors, who have traded for more than three years under the cloud of a debt crisis in Europe. The fear is that a heavily indebted country will default on its financial obligations and be forced to exit the shared currency. That could cause the eurozone to unravel, deepening the recession there and roiling international financial markets.
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