By CHRISTINA REXRODE, Associated Press
NEW YORK (AP) — Investors rejoiced over Europe last week. On Monday, they got back to worrying about the United States.
Stocks struggled to stay out of the red after the government said American manufacturing shrank in June for the first time in almost three years.
The Dow Jones industrial average opened higher but was down the rest of the day after the report came out. The Standard & Poor's 500 and the Nasdaq composite index hopped between small gains and losses.
A half-hour before the closing bell, the Dow was down 45 points at 12,834. The S&P was down a fraction of a point at 1,361. The Nasdaq was up five points at 2,939.
Stock indexes in France, Britain and Germany rose more than 1 percent, still riding the euphoria from Friday's announcement that European leaders will make it easier for banks to get bailout loans.
Chemical company DuPont fell the most of the 30 companies in the Dow. It was down $1.48, or 2.9 percent, to $49.09. Caterpillar, General Electric, Alcoa, Exxon Mobil, Boeing and other companies tied to manufacturing were also down.
The government also reported a sliver of good news about the U.S. economy: Construction spending rose in May by 0.9 percent, the most in five months.
The S&P gained more than 8 percent in the first half of the year. As the second half began, several financial analysts said they expected stocks to be volatile, at least through the November presidential election.
"We don't know who it will be," said Benjamin Segal, portfolio manager for global equities at Neuberger Berman. "And even if we did, we don't know the particular policies they'd pursue."
Analysts also cited an uncertain economy, plus tax increases and spending cuts scheduled to take effect in January.
"The market is going to continue to move from hope to despair," said Leo Grohowski, chief investment officer of Bank of New York Mellon's wealth management division.
Derrick Irwin, portfolio manager for Wells Fargo Advantage Funds, said the U.S. market would "muddle through the foreseeable future."
U.S. car companies report monthly sales Tuesday, retailers like Target and Macy's report monthly sales on Thursday, and a closely watched report on U.S. jobs comes out Friday.
And while stock gains Monday in Europe were a good sign, previous steps to ease the debt crisis in Europe have been met by market gains that quickly disappeared.
"The eurozone is really uncharted territory for a generation of investors," Irwin said. "I think anybody who thinks they really know what is happening there is at best guessing."
The day also brought reminders of how badly Europe needs help: Unemployment in the 17 countries that use the euro is at the highest level since the euro was launched in 1999.
In France, auditors warned that the country still has a big budget hole to plug. In Cyprus, leaders prepared for talks on its own bailout. And in Germany, the highest court announced it would hear arguments from people who want to block the rescue.
In corporate news:
— Bank of America fell more than 2 percent. It and other big banks are supposed to submit "living wills" Monday outlining for the government how they would unwind if they were close to failing.
— Best Buy jumped 5 percent after reports that its founder was close to making an offer to buy the company and take it private. Best Buy, an electronics store, has struggled to keep up with online-only competitors like Amazon.
— Groupon fell 9 percent after analysts at Susquehanna cut their price target for the company, noting higher marketing expenses.
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