3-day rally ends, stocks fall

Stocks fell Wednesday, ending a three-day winning streak, as investors worried about Europe's ability to contain its debt crisis. Raw materials companies had the biggest declines.

Stocks opened higher but turned mixed after the first hour of trading. By late afternoon, the Dow was down more than 80 points, giving up a 126 point gain from shortly after the opening bell. The S&P 500 and Nasdaq also fell.

Traders focused on remarks from German Chancellor Angela Merkel suggesting that the second Greek bailout package might have to be renegotiated. Several European leaders want banks to take bigger losses on Greek bonds. France and the European Central Bank oppose the idea.

"This is a market that has been fluctuating and is thoroughly susceptible to any news, any rumors, any innuendos," about Europe, said Quincy Krosby, market strategist at Prudential Financial.

The Dow Jones industrial average closed down 179.8 points, or 1.6 percent, at 11,011. Microsoft Corp. rose 0.7 percent after announcing an expanded smartphone partnership with Samsung.

The Standard & Poor's 500 closed off 24.3, or 2.1 percent, at 1,151.1. The Nasdaq composite closed down 55.3, or 2.2 percent, at 2,491.6.

The opening rally was buoyed a Commerce Department report that orders for U.S. capital goods climbed in August, an indication that American businesses are staying with investment plans. Analysts focused closely on a 1.1 percent increase in a key category that measures business investment plans. These are core capital goods that are neither used for defense nor transportation.

Through the day, raw materials companies had the biggest losses after the price of copper plunged 5.6 percent. Investors fear that Europe's problems could cause the global economy to slip into another recession, weakening demand for basic materials such as copper. Miner Freeport-McMoRan Copper & Gold Inc. fell 6.4 percent, and Cliffs Natural Resources Inc. fell 7.4 percent.

Amazon.com shot up 3 percent after the online retailer unveiled a new tablet device called the Kindle Fire. It will cost $199 and will rival Apple Inc.'s iPad.

Jabil Circuit Inc. rose 8.9 percent, the most of any company in the S&P 500, after the electronic parts maker reported strong earnings and a fourth-quarter earnings forecast that was better than analysts had anticipated.