NEW YORK?Wall Street stocks closed low on Tuesday as traders returning from a long weekend holiday cashed in on last week's robust gains amid concerns over the European banking system.
The Dow Jones Industrial Average was down 107.24 points (1.03 percent) to 10,340.69 at the closing bell, while the broader S&P 500 index shed 12.67 points (1.15 percent) to 1,091.84 points.
The tech-rich Nasdaq composite index lost 24.86 points (1.11 percent) to 2,208.89.
"Relatively light economic and equity news may be prompting traders to harvest some of last week's gains in equities," analysts at Charles Schwab said in a note.
Last week, Wall Street closed its strongest week in two months after a much anticipated jobs report lifted hopes that the US economic recovery was on the right track.
But Tuesday, fears for the global economic recovery were rekindled after the Wall Street Journal reported that stress tests to measure Europe's banks showed they held more potentially risky government debt than believed.
"An examination of the banks' disclosures indicates that some banks didn't provide as comprehensive a picture of their government-debt holdings as regulators claimed," it said, citing its own analysis.
The report underscored concerns that the recovery of the European economy was more subdued than hoped for following recent week's relatively positive data from Europe.
The worrying report on the European banks reflected on stocks of US banks on Wall Street, with the Bank of America's shares dropping 2.15 percent and JPMorgan Chase losing 2.27 percent.
Investors are nevertheless looking forward to the release of more data on the US economy, including the Federal Reserve's beige book on Wednesday and weekly employment data on Thursday.
Investors were also taking in President Barack Obama's pledge on Monday to invest $50 billion to create news jobs in a massive infrastructure campaign.
Obama was also set to make a key speech on the economy on Friday.
Last week, Wall Street closed its strongest week in two months after a much anticipated jobs report lifted hopes that the US economic recovery was on the right track.
The bond market was up as traders sought safe investment.
The yield on the 10-year US Treasury bond was down to 2.609 percent from 2.706 percent on Friday while that on the 30-year bond slipped to 3.669 percent from 3.783 percent. Bond yield and prices move in opposite directions.
