NEW YORK (AP) ? News that Spain's economy entered another recession renewed worries about the fragility of Europe's finances on Monday and nudged stocks lower.
The Spanish government said that the country's economy shrank 0.3 percent in the first three months of the year, the second straight quarter of contraction.
The worry is that Spain's size could make it difficult to rescue. Its economy is roughly twice the size of the three other countries that have tapped the European Union for bailout loans added together -- Greece, Portugal and Ireland.
A sharp drop in an index of Midwestern manufacturing and a slowdown in U.S. consumer spending last month added to worries that the U.S. economy is slowing down.
The Institute for Supply Management said its Chicago business barometer dropped in April to the lowest level in more than two years. Coming after two other weak readings for the regions around New York and Philadelphia, the market reaction to the Chicago report could have been much worse, said Clark Yingst, chief market analyst at the brokerage Joseph Gunnar.
"It's very bad news in my opinion," Yingst said. "I'd have thought the market would come under more pressure than it has."
The Dow Jones industrial average slipped 39 points to 13,189 as of 1:30 p.m. Eastern time. The slight drop pushed the Dow down 0.1 percent for April on the last trading day of the month. The Dow hasn't had a monthly loss since September.
Weaker earnings reports from health insurer Humana and the owner of the New York Stock Exchange, NYSE Euronext, also weighed on stock indexes. The Standard & Poor's 500 index fell seven points to 1,396 and the Nasdaq composite fell 21 points to 3,047.
The losses were broad. Eight of the ten groups in the S&P 500 fell, led by industrial companies. Telecoms and energy rose. The dollar and U.S. Treasury prices edged up as investors parked money in low-risk assets.
European markets were mostly lower over growing concerns about Spain. Stocks were off 1.9 percent in Spain, 1.6 percent in France and 1.3 percent in Italy.
Ratings agency Standard & Poor's downgraded Spain's government debt to just three notches above junk Friday. On Monday S&P lowered its rating for 11 Spanish banks, which are loaded with bad debt from a collapsed housing market.
The stock market is coming off its best week in a month. The S&P 500 rose 1.5 percent last week and is up 11 percent this year. If the S&P finishes lower Monday it will be the first loss after four days of gains.
Among stocks making big moves:
? Barnes & Noble jumped 62 percent on news that it will team up with Microsoft to house the digital and college businesses of the bookseller and create a Nook application for Windows 8. The companies said they may separate those businesses entirely. That could mean a stock offering, sale, or some other kind of deal. Microsoft's stock was flat.
?Health insurer Humana fell 8 percent to after reporting a large drop in first-quarter profit as the company paid out more in claims. The results fell short of Wall Street's expectations.
? NYSE Euronext, owner of the New York Stock Exchange, lost 6 percent after reporting that its income plunged in the first three months of the year. Revenues from its trading business were weak and the company had to abandon a merger with the European exchange operator Deutsche Boerse.
? Sunoco jumped 19 percent, the most of any stock in the S&P 500. The fuel-refining company agreed to be bought by Energy Transfer Partners, an operator of natural gas pipelines, for $5.3 billion.
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