By Laura Mandaro

The U.S. dollar slid against its major counterparts Monday as the possible bankruptcy of General Motors Corp. and an upcoming slew of bank earnings weighed on U.S. stocks, the main driver for the greenback on a data-light day.

The dollar index (DXY), a measure of the greenback against a trade-weighted basket of currencies, fell to 84.735 from 85.428 before the start of U.S. stock trading. The index has fallen about 0.7% since Friday but is still 4.4% higher for the year.

Trading conditions were thin. Most major European financial markets were closed due to the Easter Monday holiday.

U.S. stocks fell Monday as some investors cashed out after Thursday's 246-point surge in the Dow Jones Industrial Average, the first stock trading day after the Easter long weekend. The blue-chip average (DJI) fell more than 100 points, and was recently down 1.3% to 8,083 points. The S&P 500 (SPX) lost 0.9% to trade at 857 points.

"On a day like today, with really no economic news, people are paying a little more attention to U.S. stocks," said Jeff Sakamoto, an interbank trader with Union Bank of California.

But he said traders were probably cautious about taking on big positions ahead of earnings reports from U.S. banks. Starting with Goldman Sachs Group, Inc. (GS) earnings Tuesday, profit reports from the biggest financial institutions - including J.P. Morgan Chase & Co. (JPM) and Citigroup, Inc. (C) and Morgan Stanley (MS) are expected to determine whether U.S. stocks can hang on to five weeks of gains.

The euro extended gains versus the greenback, rising 1.3% to $1.3355. The British pound also too more ground, rising 1.2% to $1.4833.

The dollar reversed earlier gains against the Japanese yen to fall 0.2% to 100.08 yen.

The U.S. Treasury is directing General Motors (GM) to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite GM's public contention that it could still reorganize outside court, The New York Times reported Sunday.

The preparations are aimed at ensuring that a GM bankruptcy filing is ready if the company is unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in GM and to get needed concessions from the United Auto Workers union, the report said.

Strategists at Brown Brothers Harriman said the report was a "catalyst" for the euro's early bounce.

The dollar has tended to gain ground on rising economic fears and financial-sector turmoil as investors flee assets perceived to be risky, prompting flows back into the dollar. The greenback has tended to lose ground when risk appetite is on the rise.

"The market takes a break from policy this week and turns its focus to credit indicators and U.S. earnings," wrote Jessica Hoversen, a Chicago-based currency strategist at MF Global, in a research note.

"U.S. earnings will remain paramount as the market continues to gauge the health of the economy," she said.