U.S. stocks pared gains, wiping out a 99-point rally in the Dow Jones Industrial Average, as optimism over the debt crisis fizzled after Fitch Ratings said it may downgrade ratings of European nations.

International Business Machines Corp., United Technologies Corp. and Hewlett-Packard Co. lost as much as 0.8 percent to lead the Dow lower. Bank of America Corp. (BAC) rose 0.4 percent, trimming an earlier rise of 3 percent. Research In Motion Ltd. (RIM) fell 12 percent as the company delayed the release of a new generation of BlackBerry devices.

The Standard & Poor’s 500 Index rose 0.3 percent to 1,219.39 at 1:03 p.m. New York time, trimming its advance from 1.3 percent. The benchmark index has fallen 3.1 percent since Dec. 31 after being up for the year on nine days since Oct. 27. The Dow Jones Industrial Average slipped 12.03 points, or 0.1 percent, to 11,856.78 today.

“We’re seeing a market in which there’s very little long- term investor interest,” David Kelly, who helps oversee $394 billion as chief market strategist for JPMorgan Funds in New York, said in a telephone interview. “Europe is still dodging all the major decisions it needs to make in order to fix the problem and I think that the disappointment in that is still dogging the markets right now.”

France, Belgium, Spain, Slovenia, Italy, Ireland and Cyprus had their debt ratings placed on rating watch negative by Fitch Ratings, indicating they face a heightened probability of downgrade in the near-term. Fitch said a “comprehensive solution” to the euro zone crisis is “technically and politically beyond reach.”

Funding Deadline

Gains in stocks were propelled earlier by optimism the European Union will meet a Dec. 19 deadline for funding a crisis-fighting package. Luxembourg’s Jean-Claude Juncker, who leads a group of finance ministers from the region, said the EU should meet the goal for arranging loans to the International Monetary Fund. An hour after Juncker’s comments, the Bundesbank said it won’t rush to a decision on the loans, which are to be provided by EU national central banks.

“Going into a weekend, people take money off the table for fear of not knowing what’s going to happen, chiefly in Europe,” Peter Tuz, who helps manage about $800 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a telephone interview.

For the week, the S&P 500 is down 2.9 percent. The index slumped on Dec. 13 after the Federal Reserve refrained from taking new actions to bolster growth. The central bank said the U.S. economy is maintaining its expansion even as the global economy slows. U.S. stocks rose yesterday after reports on jobless claims and manufacturing boosted confidence in the world’s largest economy.