NEW YORK (CNNMoney.com) -- Stocks gave up gains by the close Monday after Moody's downgraded Greece's debt rating, reminding investors that Europe's economic woes aren't going away anytime soon.
The Dow Jones industrial average (INDU) lost 20 points, or 0.2%, the S&P 500 index (SPX) lost 2 points, or 0.2%, and the Nasdaq composite (COMP) ended little changed.
Stocks gained soundly in the morning after a report showed a big jump in industrial output in Europe, boosting the euro and reassuring investors about the global recovery. But the advance lost steam in the early afternoon on news that Moody's cut its debt rating on Greece to "junk status."
"The market is very concerned about Greece and Europe and what it means for U.S. growth, but we don't think the problems there are severe enough to send the U.S. or Asia back into recession," said Matt King, chief investment officer at Bell Investment Advisors.
He said that the Monday afternoon dip was also reflective of the fact that afternoon trading volume was thin, making the market more volatile. In addition, the market has tended to switch direction of late in the last hour or 30 minutes of each session.
However, the reaction to Moody's downgrade was fairly mild compared to how it might have unnerved investors a month ago. That's partly because the news was unsurprising, with Greece continuing to struggle despite European leaders having made billions in loans available to the nation. Six weeks ago, Moody's rival Standard & Poor's cut its rating on Greece's debt to junk.
Concerns that problems in Greece and other debt-plagued European nations would slow the global recovery pummeled U.S. stocks for more than a month. The three major gauges lost more than 10% each -- the technical definition of a "correction" -- on worries that the United States could be headed for a double-dip recession.
But stocks managed to recover at the end of last week and through early Monday afternoon as the focus expanded to include improving corporate earnings and signs the economy is recovering outside the job market.
"We think we've seen a short-term correction, not the start of a bear market," King said. "Hopefully the market will become less manic over the next few months and focus more on the fundamentals.
Caterpillar (CAT, Fortune 500), United Technologies (UTX, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500) were among the few gainers on the Dow, while DuPont (DD, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Microsoft (MSFT, Fortune 500) and Travelers (TRV, Fortune 500) were among the decliners.
Market breadth was positive. On the New York Stock Exchange, winners topped losers three to two on volume of 1.14 billion shares. On the Nasdaq, advancers topped decliners seven to six on volume of 1.90 billion shares.
No major economic news was released Monday, but reports are due later in the week on housing, wholesale and consumer inflation and jobless claims.
BP: President Obama reportedly wants the company to set up a fund to pay for damages from the leaking oil well, two months after the initial explosion. Lawmakers want BP (BP) to make as much as $20 billion available.
But the company may not be able to comply, as it only had $7 billion in cash on hand at the end of the first quarter and is currently expected to pay out dividends on June 21st. BP is expected to have discussed the issue of dividends at its board meeting Monday. Meanwhile, its stock price continues to plummet, losing 9.7% Monday to $30.67 per share.
Euro: The euro rose 0.9% versus the dollar, continuing to recover after touching a four-year low of $1.188 last week. The dollar fell 0.1% against the yen.
World markets: European markets gained. Britain's FTSE 100 rose 0.7%, Germany's DAX rose 1.3% and France's CAC 40 gained 2%.
Asian markets gained. Japan's Nikkei rose 1.8%, Hong Kong's Hang Seng gained 0.9% and China's Shanghai Composite added 0.3%.
Commodities: U.S. light crude oil for July delivery rose $1.18 to $74.96 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery fell $7.60 to $1,222.60 an ounce.
Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.28% from 3.22% late Friday. Treasury prices and yields move in opposite directions. 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.80% | 3.88% | |
| 15 yr fixed | 3.20% | 3.23% | |
| 5/1 ARM | 3.84% | 3.88% | |
| 30 yr refi | 3.82% | 3.93% | |
| 15 yr refi | 3.20% | 3.23% |
Today's featured rates:
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 32,627.97 | -234.33 | -0.71% |
| Nasdaq | 13,215.24 | 99.07 | 0.76% |
| S&P 500 | 3,913.10 | -2.36 | -0.06% |
| Treasuries | 1.73 | 0.00 | 0.12% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Ford Motor Co | 8.29 | 0.05 | 0.61% |
| Advanced Micro Devic... | 54.59 | 0.70 | 1.30% |
| Cisco Systems Inc | 47.49 | -2.44 | -4.89% |
| General Electric Co | 13.00 | -0.16 | -1.22% |
| Kraft Heinz Co | 27.84 | -2.20 | -7.32% |
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