updated 5/16/2011 4:21:11 PM ET 2011-05-16T20:21:11

Stocks closed lower for a second day, dragged down by technology companies and concerns about Europe's debts.

European finance ministers approved $110 billion in rescue loans to Portugal on Monday, but have yet to decide on another rescue package for Greece.

The arrest of the head of the IMF could make solving Greece's problems more difficult.

Technology companies sustained the largest losses. Yahoo! Inc., Amazon.com Inc. fell by more than 4 percent.

Trading volume was 3.5 billion shares. According to preliminary calculations, the Dow fell 47.38 points, or 0.38 percent, to 12,548.37. The S&P 500 fell 8.30, or 0.62 percent to 1,329.47. The Nasdaq composite fell 46.16, or 1.63 percent, to 2,782.31.

More than two shares fell for every one that rose on the New York Stock Exchange.

The U.S. stock market has lost some of its momentum in the last few weeks after finishing its best first quarter since 1998. Companies in so-called defensive industries like health care, utilities and consumer staples have outperformed lately due in part to concerns that high gas prices will slow the economy and cut into corporate profits.

Investors are growing increasingly concerned over the prospect of an unprecedented U.S. default on its debt as well. Treasury Secretary Timothy Geithner told Congressional lawmakers in a letter Monday that the agency is taking steps, including accounting measures and halting investments in two government pension plans, to postpone hitting the federal debt limit until August.

"The main thing hanging over most financial markets right now is what's going to happen with the debt ceiling and government borrowing and spending," said Tim Courtney, the chief investment officer at Burns Advisory Group in Oklahoma City.

Quotes delayed 15+ min.

Two well-known retailers in the U.S. fell after reporting quarterly results Monday. Home improvement company Lowe's Cos. fell 2 percent in after its quarterly report missed Wall Street's estimates and the company cut its outlook for the year. The company said that its profit fell 6 percent in the first quarter because of the combination of bad weather and a decline in consumer spending. J.C. Penny Co. Inc. lost 1.5 percent despite raising its full year profit estimates.

One of the most talked-about deals on Wall Street was officially nixed as well. The parent company of the New York Stock Exchange dropped nearly 11 percent after competitors Nasdaq OMX Group and ICE announced that they had withdrawn their hostile bid for the company. NYSE Euronext had angered its shareholders by refusing to meet with the two companies, which offered a higher price than what NYSE received from a German exchange operator. The withdrawn offer clears one hurdle to the proposed combination of the NYSE and its German counterpart.

Stocks in Europe fell broadly after the arrest of the head of the IMF in New York on charges he sexually attacked a hotel maid. The official, Dominique Strauss-Kahn, had been heavily involved in trying to solve the debt crises in Portugal and Greece. The Euro Stoxx 50, an index of large companies in countries that use the euro, lost 0.5 percent. Greece's stock market fell nearly 2 percent.

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