By TOBY STERLING
AMSTERDAM (AP) - European markets gave back some of their earlier gains Tuesday with U.S. stocks mixed as enthusiasm about prospects for resolving Spain's banking crisis faded - and the euro again plumbed year lows against the dollar.
Britain's FTSE 100 finished up 0.65 percent at 5,664.07. France's CAC-40 was up 0.6 percent at 3,175.41, while Germany's DAX rose 0.79 percent to 6,438.33.
Meanwhile the Dow was up 0.11 percent by mid-session at 12,750.90 with the S&P 500 down 0.1 percent at 1,351.09.
Eurozone finance ministers set off a rally Tuesday morning by agreeing some of the terms for Spain's bank bailout, with up to $30 billion (€24.4 billion) being made available by the end of the month. Representatives from the 27 European union countries agreed later Tuesday to grant an extension on Spain's program of deficit cuts until 2014. The interest rate, or yield, on Spain's 10-year bond dropped from a high Monday of 7.03 per cent to 6.78 percent in afternoon trade.
But any enthusiasm dimmed as it became clear that Germany's constitutional court could take months to decide the legality of the country signing up to Europe's bailout fund, the European Stability Mechanism.
The euro reversed course abruptly at around 8 a.m. Eastern Standard Time and eventually dropped below 1.2240, a year low, before recovering slightly.
The dip may have been linked to remarks by St. Louis Federal Reserve Bank President James Bullard. Speaking in London, he said he didn't see any need for further quantitative easing in the U.S.
"In any case, it shows how fragile any recovery in the euro is, the level of caution with which people are treating this latest 'bailout,' if that's the correct term," said Paul Kavanagh of Killik & Co in London.
He said the market will now likely turn to corporate earnings for its direction, with expectations low.
The stronger dollar hit U.S. commodity-linked stocks, and a profit warning from Applied Materials also hurt sentiment. The first major U.S. corporation to report second quarter earnings, Alcoa, fractionally beat earnings expectations, but its sales fell and shares declined.
In Asia, stock markets fell after China said the growth rate for its imports fell in June by half from the previous month's level to 6.3 percent while exports grew 11.3 percent, down from May's 15.3 percent.
China's slowing demand for oil, iron ore and other foreign goods is bad news for commodity-exporting economies and others that had been looking to relatively strong Chinese growth to help drive demand for their products.
China cut lending rates last week for the second time in a month in a bid to boost waning economic growth, but some analysts say policymakers have been too slow to react to signs of a sharp slowdown.
"Expectations have been high for a quick turnaround in economic growth but the reality has been a deliberate, ponderous easing that has failed to pre-empt the weaker economic data," said Sean Darby, chief global equity strategist for Jefferies. "Although valuations are appealing, a modest bearish position seems warranted until interest rates move to their cycle lows."
Japan's Nikkei 225 index fell 0.4 percent to 8,857.73 and Hong Kong's Hang Seng was off 0.2 percent at 19,396.40.
Benchmark oil for August delivery was down 71 cents at $85.25 a barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro recovered slightly from its lows but was at $1.2253, down from $1.2309 late Monday in New York. The dollar dipped to 79.46 yen from 79.58 yen.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.