Stocks fell on Friday after news that U.S. consumers spent more last month only because higher gas prices forced them to.
Even with the declines on the last trading day of the quarter, stocks were set to post small gains for the three-month period.
In early afternoon trading, the Dow Jones industrial average was down 49 points at 13,437. The Standard & Poor's 500 index was down six points at 1,441. The Nasdaq composite index fell 14 points to 3,123. The losses had been steeper in the morning before stocks recovered somewhat around midday.
Americans spent more in August even though their income barely grew, the Commerce Department said. But the spending increase was driven by higher gasoline prices.
Investors were also worried about Spain's financial health. The Bank of Spain said Friday that the country's troubled banks have a shortfall of about $69.2 billion. That followed by a day the government's announcement of big spending cuts aimed at convincing potential bailout creditors and investors that it has a rock-solid plan to heal its public finances.
Moody's, the credit rating agency, is also expected to weigh in on Spain's creditworthiness. There are concerns the government's rating will be cut to "junk" status.
Stocks finished higher in Asia on continued speculation that China's central bank will act soon to help the world's No. 2 economy.
But the worries about Spain pushed stocks lower in Europe. The CAC 40 in France fell 2.5 percent, the FTSE 100 in Britain was down 0.6 percent, and Germany's DAX fell 1 percent.
In the U.S., stocks fell in all industry groups in the S&P 500 except utilities. Energy stocks and materials each had the biggest declines, down about more than half-percent.
Even with Friday's declines, the Dow was up 4 percent for the quarter, and the S&P 500 was up 5.8 percent.
"It's been a good quarter, but at least for the day we seem to be limping across the finish line," said Lawrence Creatura, portfolio manager at Federated Investors.
Among U.S. stocks with noteworthy moves:
— Bank of America Corp. fell 12 cents, or 1.3 percent, to $8.85 after saying it has agreed to pay $2.43 billion to settle a class-action lawsuit related to its acquisition of Merrill Lynch.
— Blackberry maker Research in Motion Ltd. jumped 56 cents, or 7.8 percent, to $7.70 after reporting a smaller-than-expected quarterly loss on Thursday night.
— Shoemaker Nike fell 86 cents, or 0.9 percent, to $95.14 after saying its first-quarter net income fell 12 percent because higher sales were offset by increased ad spending. The results were better than Wall Street had expected, but investors seemed more worried about the trail ahead for Nike rather than its performance in the last quarter.
— McDonald's Corp. fell $1.73, or 1.9 percent, to $91.54 after a Janney Capital Markets cut its rating and price target, saying difficult year-ago comparisons may pressure sales at stores open at least 13 months, which is a key revenue metric for retailers.
The yield on U.S. 10-year Treasury notes fell to 1.631 percent.
- Investment & Company Information