Stocks Close Near Lows, Weighted by Financials

NEW YORK (TheStreet) -- Blue-chips stocks stumbled to a triple-digit decline Monday, pressured by sluggish financial shares and persisting fears about European sovereign debt.

The Dow Jones Industrial Average closed down 104 points, or 1%, to 9908, the first time it close below 10,000 since November. The S&P 500 shed 9 points, or 0.9%, to 1057 and the Nasdaq fell 15 points, or 0.7%, to 2126.

"Although we maintain many of our more constructive views on markets -- the global recovery remains intact as per recent encouraging data, corporate earnings are strong, and valuations undemanding -- it also appears that the shadow cast over markets by European sovereign risk is unlikely to lift soon," said UBS economist Larry Hatheway.

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Over the weekend, leaders from the Group of Seven met to allay fears about European debt levels.

U.S. Treasury Secretary Timothy Geithner, meanwhile, insisted the U.S. will "never lose" its AAA credit rating and said global investors would always seek the safe haven of U.S. Treasuries in times of crisis.

Geithner's statement will be put to test as soon as Tuesday, as the U.S. Treasury prepares to auction $81 billion of government securities this week.

The benchmark 10-year Treasury note weakened 1/32, lifting the yield to 3.573%.

On an otherwise downbeat day, housing sector stocks served as a bright spot with the Philadelphia Housing Sector Index up 0.8%. Pulte Homes(PHM) improved 2.3% ahead of its fourth-quarter earnings release due Tuesday.

Home improvement retailer Home Depot(HD) led the Dow, helped by an upgrade to overweight from equal weight at Morgan Stanley. Shares traded 2.2% higher to $28.59.