business

NEW YORK - U.S. stocks fell Monday as investors worried about Europe's debt crisis and the debate over lifting the U.S. debt ceiling ahead of a big week for corporate results.

The Dow Jones industrial average fell 94.57 points, or 0.8 percent, to 12,385.16, with 29 of 30 components ending lower.

The Dow last week lost 1.4 percent, capping its worst week in more than a month.

Uncertainty surrounding high government debt levels in Europe and the U.S., and growing wariness about lawmakers' ability to deal with them, have been pressuring stocks.

"Politicians on both sides of the Atlantic are not explaining realities to the voters, and this lack of leadership, as much as anything, remains a barrier to improvements in both market and economic prospects," said David Kelly, chief market strategist at J.P. Morgan Funds. "The reality is that any solution to U.S. debt problems will require a disciplined plan to both cut entitlement spending and raise taxes over a number of years. Any solution to the European debt problem will eventually require the richer nations in Europe to subsidize the budgets or at least the borrowing costs of their more troubled brethren."

Bank of America Corp. led blue-chip losses with a drop of 2.8 percent after Bloomberg reported that mortgage losses may force the bank to build its capital reserves by $50 billion and to break its chief executive officer's vow to raise the company's dividend.

Bank of America reports earnings Tuesday, and is one of more than 100 companies in the S&P 500 slated to report quarterly results this week.

The Standard & Poor's 500 index fell 10.7 points, or 0.8 percent, to 1,305.44. The Nasdaq composite index was off 24.69 points, or 0.9 percent, at 2,765.11.

Investors' concerns included Europe's debt crisis and debt-ceiling talks in Washington, where lawmakers face an Aug. 2 deadline for raising the debt limit.

In Europe, European Union leaders plan a summit on Thursday as they attempt to prevent the region's troubles from spreading.

In Washington, House Republicans have set a vote for Tuesday on what could prove to be a symbolic gesture, as Democratic leaders say the GOP's plan cannot pass the Senate.

"While the vast majority of lawmakers recognize that not raising the debt ceiling would lead to economic and financial disaster, the negotiating parties appear willing to tussle all the way down to the wire," Kelly said.

Record closing for gold

On the New York Mercantile Exchange, oil futures fell to just under $96 a barrel, and gold futures closed at a record $1,602.40 an ounce.

Financial stocks were particularly hard hit Monday, weighed by concerns that recent European bank stress tests under-represented banks' sensitivity to a sovereign-debt default and a selloff in insurer stocks.