US stocks decline on Europe debt concerns

US stocks declined in early trade on Friday as fresh concerns over European debt crisis weighed on sentiment.

The S&P 500 Index declined 8.40 points, or 0.69 percent, to trade at 1,190.54 at 9:55 a.m. EDT. The Dow Jones Industrial Average declined 95.74 points, or 0.86 percent, to trade at 11,091.21. The Nasdaq Composite Index declined 0.39 percent.

Investors continued to worry that sovereign debt problems in Europe may continue to spread.

A report said the European Central Bank is urging Portugal to follow Ireland's example and seek financial aid from the International Monetary Fund, while the Portuguese government denied the news report. There are also fears that Spain might be forced to follow suit.

In banking sector, Citigroup declined 0.79 percent, Wells Fargo fell 0.71 percent and Bank of America declined 0.98 percent on European jitters.

Basic resources stocks declined on speculation over further Chinese monetary policy tightening to cool inflation.

Among the Dow components, Alcoa, American Express, Chevron, Intel and HP fell more than1.3 percent.

Shares of CPI International surged 33.17 percent after the company said it agreed to be acquired by an affiliate of private equity firm Veritas Capital for about $525 million in cash.

Trading volume is expected to be light on Friday after markets enjoyed a Thanksgiving Holiday on Thursday and stock markets will close early at 1 p.m. ET.

On Wednesday, US stocks rallied broadly on some encouraging numbers from the labor market, shrugging off worrying geopolitical developments in Korea and some dour housing data.

The euro declined 0.86 percent to 1.3244 against the dollar on debt fears and the yen gained 0.43 percent against the greenback.

Crude oil futures declined 0.60 percent to $83.36/barrel and gold futures declined 1.34 percent on strong dollar.

European stock markets are currently trading lower with FTSE100 down by 42.97 points, DAX30 down by 48.30 points and CAC 40 down by 45.01 points.