Adding to the risk of a rocky trading week are bond auctions in Spain and Italy, two countries that economists worry could face the same fate as Greece. Spain aims to issue three- and five-year bonds Thursday, while Italy follows suit Friday in its own auction of bonds and floating-rate notes.

"We would like to be able to report that Euroland's sovereign debt, financial and economic crises have all disappeared," said Carl Weinberg, economist with High Frequency Economics. "The reality is that none of these crises has been resolved, and risk of an unhappy resolution remains high."

While the euro strengthened, European stocks closed in the red. Germany's DAX lost 0.67% while London's FTSE was down 0.66%. Japan's Nikkei Average settled 1.16% lower, and Hong Kong's Hang Seng was up 1.47%.

Of the 30 Dow components, seven traded lower with Microsoft ( MSFT) and McDonald's ( MCD) sinking to the bottom.

In corporate news, Bristol-Myers Squibb ( BMY) plans to acquire Inhibitex ( INHX) for $2.5 billion, . The $26 a share offer is more than two-and-a-half times the company's closing stock price on Friday. Bristol-Myers would gain control of Inhibitex's INX-189, a pill in phase II studies with potential to become a component in the first all-oral therapies against hepatitis C. Inhibitex shot up 140.1% to $23.70 after the announcement.

Zynga ( ZNGA) dropped 9.2% to $8 on concerns about the company's revenue. Shares fell for the second straight day following a research report from Macquarie Group analyst Ben Schachter who is wary about the maker of FarmVille, as it is highly dependent on a small number of users for the majority of its revenue.

Netflix ( NFLX) shares surged 13.8% to $98.18 after hedge fund manager Whitney Tilson told CNBC that he thinks the online movie rental company, with a less than $5 billion market cap, could become an easy buyout target.

Lions Gate Entertainment ( LGF) is close to buying Summit Entertainment, the maker of the vampire movie series Twilight. Lions Gate plans to spend $400 million in cash and stock on the movie studio, according to a report by The Associated Press. Shares were up 3.1% to $8.67.

Ford's ( F) sales in China rose 7% in 2011, while sales for General Motors ( GM) during the year in China increased 8.3%. Ford was up 0.8% while GM was down 0.4%.

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