DLM Del Monte Foods Co.

By Donna Kardos Yesalavich

NEW YORK (MarketWatch) -- U.S. stocks declined, spending Black Friday in the red as worries over the euro zone's finances overshadowed positive readings on the start of the holiday shopping season.

The Dow Jones Industrial Average (DJI) dropped 80 points, or 0.7%, to 11109, in recent trading. Alcoa (AA) and DuPont (DD) were hit the hardest, falling 1.4% and 1.5% respectively.

Friday's early drop puts the Dow off about 1.3% for the week, following its negative trend for the week of Thanksgiving seen in recent years.

The Nasdaq Composite (RIXF) dropped 0.2% to 2,537. The Standard & Poor's 500 index(SPX) declined 0.6% to 1191, with all its sectors lower, led by materials and energy.

The declines came as investors homed in on Spain as another weak spot in the euro zone. Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to dispel the growing anxiety, saying there was "absolutely" no chance the euro zone's fourth-largest economy would seek a bailout from the European Union. But his attempt to calm the markets had little effect; the euro tumbled and the selloff in Spanish and Portuguese sovereign bonds continued. The euro traded at $1.3251 recently.

"Besides being one of the larger economies over there, it's a renewal of contagion worries and ... it just puts further stress on the EU," said Bernie Williams, vice president of private investment management at USAA Investment Management.

European leaders sparred over whether to commit more funds to rescue struggling euro-zone countries, as financial-market pressure on the region's weakest economies intensified. The European Union's executive arm, the Brussels-based EU Commission, floated a proposal on Wednesday to double the size of Europe's 440 billion ($588 billion) bailout fund for euro-zone governments, but the idea was dismissed by Germany, according to people familiar with the situation.

The uncertainty of the euro-zone debt situation prompted investors to pull out of riskier assets, sending crude-oil futures lower. Metals futures also fell, prompting gold to slip to $1,355 an ounce.

Investors sought safety in the dollar and U.S. Treasurys. The U.S. Dollar Index (DXY), tracking the U.S. currency against six others, climbed 0.6%. Gains in Treasurys pushed the yield on the 10-year note (UST10Y) down to 2.87%.

The euro-zone worries overshadowed strong early signs on Black Friday sales in the U.S. Lines wrapped around stores and parking lots across the nation as shoppers sought early morning deals, especially on consumer electronics and toys. About 138 million Americans are expected to go shopping this weekend.

Some $447 billion will be spent during the holiday season, up 2.3% from last year, the National Retail Federation predicts, with Black Friday weekend seeing about $41.2 billion in business. An NRF survey also found that up to 138 million people plan to shop this weekend, higher than the 134 million people who planned to do so last year.

"The consumer, for all the unemployment worries, the ones that have jobs have held in there," Williams said.

Still, retail shares were mixed. Wal-Mart Stores (WMT) fell 0.4%; Amazon.com (AMZN) slipped 0.2% and TJX Co. (TJX) shed 0.4%, but GameStop (GME) jumped 0.7%, Big Lots (BIG) climbed 0.1% and Best Buy (BBY) added 0.2%.

Among other stocks in focus, Del Monte Foods (DLM) rose 4.7% after the maker of pet foods and canned vegetables announced it agreed to a takeover by an investor group led by Kohlberg Kravis Roberts & Co. LP in what would be one of the year's largest private-equity buyouts.

Boeing

(BA) fell 0.1%. The company is making changes to the new 787 Dreamliner's electrical system and the software that runs it after an in-flight fire and subsequent power failure aboard one of the planes more than two weeks ago. The company did not say how long it would take to finish designing the changes and then implement them.

The Nasdaq Composite (RIXF) dropped 2.2% to 2,540. The Standard & Poor's 500 index (SPX) declined 0.9% to 1188, with all its sectors lower, led by materials and energy.

Friday's drop -- which puts the Dow off about 1.2% for the week, following its negative trend for the week of Thanksgiving seen in recent years -- came as the euro zone's sovereign debt crisis continued to escalate, with the market homing in on Spain as another potential weak spot.

Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to dispel the growing anxiety surrounding the country's fiscal position Friday, saying there was "absolutely" no chance the euro zone's fourth-largest economy would seek a bailout from the European Union. But his attempt to calm the markets had little effect, with the euro tumbling and the selloff in Spanish and Portuguese sovereign bonds continuing. The euro traded at $1.3244 recently.

Meanwhile, European leaders sparred over whether to commit more funds to rescue struggling euro-zone countries, as financial-market pressure on the region's weakest economies intensified. The European Union's executive arm, the Brussels-based EU Commission, floated a proposal on Wednesday to double the size of Europe's 440 billion ($588 billion) bailout fund for euro-zone governments, but the idea was dismissed by Germany, according to people familiar with the situation.

Ireland's negotiations with the EU and the International Monetary Fund over the details of the country's 85 billion ($113.52 billion) financial-assistance package appeared to be drawing to a conclusion. But a report in the Irish Times Friday that senior bondholders in Irish banks could be compelled to pay some of the costs of the bailout led Allied Irish Banks PLC (AIB) and Bank of Ireland PLC's senior bonds to fall around 0.05 percentage points to trade at around 80% of face value.

The euro-zone worries overshadowed strong early signs on Black Friday sales in the U.S. Special sales and a sense of tradition pushed shoppers out the door early the day after Thanksgiving, traditionally seen as the start of the holiday shopping season. Lines wrapped around stores and parking lots across the nation as shoppers sought early morning deals, especially on consumer electronics and toys. About 138 million Americans are expected to go shopping this weekend.

Some $447 billion will be spent during the holiday season, up 2.3% from last year, the National Retail Federation predicts, with Black Friday weekend seeing about $41.2 billion in business. An NRF survey also found that up to 138 million people plan to shop this weekend, higher than the 134 million people who planned to do so last year.

However,