Euro falls after Spanish bank takeover

The euro started the week by resuming its decline. Reuters reports:

The euro fell against the dollar on Monday, stung by a new round of worries that the euro zone's debt crisis could spread after Spain's central bank took over a small savings bank.

The Bank of Spain on Saturday said it had taken over savings bank CajaSur following the failure of its planned merger with another regional lender. The news caused the euro to retreat from last week's gains.

Although CajaSur is relatively small, analysts said the bailout highlighted weakness in the European banking sector and fueled worries that other savings banks could require money at a time when Spain is trying to slash government spending and repair public finances.

In the US, stocks mostly gave up their gains on Friday despite a better-than-expected rise in existing home sales in April. From Bloomberg:

A larger-than-projected increase in April sales of previously owned homes was accompanied by an even bigger jump in inventories, raising the risk U.S. property values will backslide.

Purchases climbed 7.6 percent to a 5.77 million annual rate as buyers rushed to qualify for an expiring government tax credit, the National Association of Realtors said today in Washington. The number of homes on the market surged by the most in a decade, while median prices showed the biggest gain in four years...

Stocks dropped on concern Europe’s debt crisis has further to run. The Standard & Poor’s 500 Index fell 1.3 percent to close at 1,073.65. Treasury securities rose, sending the yield on the benchmark 10-year note down to 3.21 percent from 3.24 percent late on May 21...