NEW YORK: U.S. stocks fell on Tuesday as investors cashed in gains after driving the S&P 500 index to its highest in four years, but the euro rallied against the dollar on hopes the European Central Bank will soon start buying Spanish and Italian bonds to contain the debt crisis. Spanish borrowing costs fell and Portuguese government bond yields slid to levels reached before Lisbon agreed to a bailout deal in May 2011, with traders citing media reports that the ECB was drawing up detailed plans about bond-buying.
The perception of declining risks from the euro crisis has been a major factor behind stocks' recent gains. Earlier in the session, the broad Standard & Poor's 500 Index climbed to its strongest intraday level since May 2008, before surrendering gains ahead of technical resistance.
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