Worries about the outlook for growth in China and a slide in the price of oil pushed the Standard & Poor's 50 index to its biggest loss in almost seven weeks Monday. Stocks were down across the indexes.
At the close on Wall Street, the S&P 500 had dropped 16.11 points, or 0.8 percent, to 1,994.29. The loss was the biggest one-day decline for the index since Aug. 5. The index is down 0.5 percent this month. The Dow Jones industrial average fell 107.06 points, or 0.6 percent, to 17,172.68. The Nasdaq composite dropped 52.10 points, or 1.1 percent, to 4,527.69.
Investors are nervous about China following a run of soft economic data that suggests growth in the world's second-largest economy is slowing. The worries about China helped push down the price of oil. That in turn weighed on energy stocks.
The stock market has struggled to gain traction this month as investors have weighed signs of an improving economy in the United States against evidence of slowing growth in both Europe and Asia.
"We've got China weighing down on stocks," said Kristina Hooper, U.S. investment strategist at Allianz Global Investors. "The lack of transparency there always creates greater uncertainty."
The losses were broad, and all 10 industry sectors that make up the S&P 500 declined. Energy stocks were the second-biggest decliners, slumping 1.4 percent as the price of oil fell. Companies that rely the most on consumer spending, such as entertainment and media conglomerates and retailers, fell the most.
The price of oil dropped on concerns that Libya's production is picking up at a time when global economic indicators point to weaker demand from countries including China. Benchmark U.S. oil fell 89 cents to $91.52 a barrel. Analysts say U.S. oil could test the $90 mark sometime this week.
Smaller companies were also among the biggest decliners as investors shunned the riskier parts of the market.
The Russell 2000, an index which tracks small-company stocks, fell 1.5 percent, more than other indexes. The Russell has dropped 3 percent so far this year, compared with gains of 7.9 percent for the S&P 500 and 3.6 percent for the Dow.
On Monday, stocks were also hurt by a report showed that fewer Americans bought homes in August as investors retreated from real estate and first-time buyers remained scarce.
If the trend continues it could dent consumers' confidence, said Allianz's Hooper. "It really speaks to much of middle-class America. The largest component of their net worth is their home," she said. "It could really put a damper on consumer spending and consumer sentiment."
The National Association of Realtors said sales of existing homes fell 1.8 percent to a seasonally adjusted annual rate of 5.05 million. That followed four months of gains. August sales fell from a July rate of 5.14 million, a figure that was revised slightly downward.
The report weighed on home builder stocks.