Stocks fell Monday as investors lowered their expectations for a key summit of European Union (EU) leaders later this week. The EU leaders are expected to discuss steps towards a banking union and other measures to increase economic activity, but investors are skeptical that Germany will support more radical moves to share the debt burden of struggling euro-zone governments. Spain was in focus Monday after Madrid officially requested EU loans to help rescue the country's banks. Meanwhile, Greek Finance Minister Vassilis Rapanos resigned due to health reasons, and Cyprus became the fifth euro-zone country to seek a rescue. In U.S. economic news, sales of new homes rose more than expected in May to an annual rate of 369,000. It was the best performance in more than a year, but still only about half of the 700,000-unit pace economists consider healthy. The U.S. dollar gained versus the euro but fell versus the yen. Light sweet crude oil for August delivery fell 55 cents to $79.21 a barrel on the New York Mercantile Exchange. Gold futures rose $21.50 to $1,588.40 an ounce. The Dow Jones industrial average fell 138.12, or 1.1 percent, to 12,502.66. Bank of America and Hewlett-Packard were the worst performers on the index, while Wal-Mart shares rose 1 percent. The broader Standard & Poor's 500 index fell 21.30, or 1.6 percent, to 1,313.72. The technology-heavy Nasdaq composite index fell 56.26, or nearly 2 percent, to 2,836.16. Shares of Blackberry-maker Research in Motion (RIM) fell 7.5 percent after Morgan Stanley analysts downgraded the stock. Chesapeake Energy faced continued speculation that the natural-gas producer is a takeover target, and its stock plummeted 8 percent on the New York Stock Exchange after a Reuters investigation found that the company and its competitors artificially held down land prices.
