Eurozone worries shake market

NEW YORK – U.S. stocks declined about 2 percent Monday for their worst session in two weeks, retreating from last week’s rise after Germany played down the idea of a quick fix for Europe and an index of regional manufacturing fell short.

“Part of this rally over the last two weeks was fueled by the expectation of a newfound sense of urgency among policymakers in the eurozone, so this morning’s comments to some degree countered that growing belief that things were going to get better,” said Phil Orlando, equity market strategist at Federated Investors.

“The bigger picture is we just had a terrific rally, with the S&P 500 index up about 14 percent in the last two weeks, so investors decided to take a deep breath and lock some profits in,” he added.

Moving back into the red for the year, the Dow Jones industrial average lost 247.49 points, or 2.1 percent, to close at 11,397. A drop of 6.6 percent in Alcoa Inc. shares led declines for all 30 of the Dow’s components.

The S&P 500 fell 23.72 points, or 1.9 percent, to 1,200.86. The Nasdaq composite index was off 52.93 points, or 2 percent, to 2,614.92.

It was the worst day for the major indexes since Oct. 3, when a sharp tumble by bank shares led stocks to their lowest closing levels in more than a year. The Dow and Nasdaq are down more than 1 percent year to date after turning positive for 2011 on Friday. The S&P 500 is down 4.5 percent for the year.

Germany said European governments would not resolve the eurozone debt crisis at the European Union meeting slated for Oct. 23, with a spokesman for German Chancellor Angela Merkel saying the discussions would likely continue into 2012.

Financial stocks were the hardest hit, leading broad losses for the S&P 500’s 10 industry groups with a 3.3 percent drop. Wells Fargo & Co. fell 8.5 percent after the company reported a third-quarter revenue decline.