Stocks slide; S&P negative for the year

Stocks weakened Wednesday, ending a five-day advance in the Standard & Poor's 500 index, as new signs of strain emerged in the European banking system.

The Dow Jones industrial average lost nearly 140 points. The S&P is now negative for the year again, after barely turning positive on Friday.

The European Central Bank said banks had parked $590.72 billion with it overnight, surpassing the record set only Monday. That means European banks were less willing to take the risk of making short-term loans to each other, opting to earn low interest rates from the ECB. The disclosure hurt the euro, which fell to $1.291, its lowest level against the dollar since January.

The worrying news from the ECB overshadowed two successful auctions of Italian government debt. Italy was able to pay much lower borrowing rates than last month. The strong demand from investors raised hopes that Italy would be able to avoid sinking into a financial crisis, as smaller countries like Greece and Portugal have.

John Merrill, chief investment officer at Tanglewood Wealth Management, said markets would remain vulnerable to flare-ups in Europe's financial crisis until leaders there come up with more convincing solutions for paying down their enormous debt loads and keeping the 17-nation currency union intact. "We live in a Band-Aid world," Merrill said. "Nobody really is addressing underlying issues."

Closing figures Wednesday for the Dow were a drop of 139.94 points, or 1.14 percent, to 12,151.41. The S&P fell 15.79, or 1.25 percent, to 1,249.64, and the Nasdaq exchange was down 35.22 points, or 1.34 percent, to 2,589.98.