U.S. stocks fell on Monday, with small companies taking it on the chin, as China signaled it would not boost stimulus and after home sales unexpectedly declined in August.
"The comments from the Chinese finance minister were not particularly hopeful," said Cameron Hinds, regional chief investment officer for Wells Fargo Private Bank, referring to comments by Chinese Finance Minister Lou Jiwei that Beijing would not make big changes in response to one economic indicator, curbing thinking that softer economic readings would prompt additional stimulus from the central government.
Apple rose after the technology giant reported weekend sales of the latest versions of its iPhone topped 10 million. Yahoo shares fell after Bank of America Merrill Lynch and Sanford Bernstein downgraded its shares after Friday's market debut by Alibaba Group Holding. Dresser-Rand Group rose after Germany's Siemens said it would acquire the maker of oilfield-equipment maker for $7.6 billion.
The Russell 2000 Index of small caps dropped 1.6 percent, with Carbo Ceramics among the biggest decliners. The supplier to the oil-and-gas industry projected sales of ceramic proppant would fall in the third quarter.
Already in the red, equities steepened their slide after the National Association of Realtors reported sales of previously owned homes declined 1.8 percent last month.
The Federal Reserve Bank of Chicago on Friday reported U.S. economic activity declined in August.
Speaking at Bloomberg Markets Most Influential Summit in New York, Fed Bank of New York President William Dudley said the central bank's rate guidance is not written in stone and reiterated the Fed's monetary policy remains data dependent.
Major U.S. Indexes
After falling as much as 120 points, the Dow Jones Industrial Average shed 107.06 points, or 0.6 percent, to 17,172.68, with United Technologies pacing blue-chip declines that extended to 23 of 30 components.
The dropped 16.11 points, or 0.8 percent, to 1,994.29, with consumer discretionary and energy leading sector declines that extended to all 10 major industry groups.
Monday's losses were the largest single-day drop for the Dow and S&P 500 since Aug. 5.
The CBOE Volatility Index, a measure of investor uncertainty, rose 13 percent to 13.69.
The Nasdaq lost 52.10 points, or 1.1 percent, to 4,527.69.
For every stock advancing, five fell on the New York Stock Exchange, where nearly 697 million shares traded. Composite volume surpassed 3.3 billion.
"We could be in for a more defensive market for most of the week as we end the quarter," said Peter Cardillo, chief market economist at Rockwell Global Capital.
On the New York Mercantile Exchange, the October-crude contract lost 78 cents, or 1 percent, at $90.87 a barrel and gold futures for December delivery rose $1.30 to $1,217.90 an ounce.
The U.S. dollar gained against the currencies of major U.S. trading partners, extending a 10-week win streak for the greenback; the yield on the 10-year Treasury note used in figuring mortgage rates and other consumer loans fell a basis point to 2.567 percent.
On Friday, stocks mainly climbed, with the Dow ending at a record, as investors welcomed Alibaba's debut and Scotland's vote to remain in the U.K.
—By CNBC's Kate Gibson
Coming Up This Week:
9 a.m. FHFA home prices
10:00 a.m. New-home sales
12:15 p.m. Cleveland Fed President Loretta Mester
1:00 p.m. Chicago Fed President Charles Evans
8:30 a.m. Weekly jobless claims
8:30 a.m. Durable goods
1:20 p.m. Atlanta Fed President Dennis Lockhart
8:30 a.m. GDP revision
9:55 a.m. Consumer sentiment
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