Updated from 4:16 p.m. EST

Wall Street ended a tumultuous year on a downbeat note Monday, with stocks tumbling in a lightly traded session as traders closed out their positions for 2007.

The

Dow Jones Industrial Average

fell 101.05 points, or 0.76%, to 13,264.82. Only seven of the Dow's 30 components advanced, with declines of 1.6% in telecom names

AT&T

(T) - Get Report

and

Verizon

(VZ) - Get Report

pressuring the index.

Elsewhere, the

S&P 500

fell 10.13 points, or 0.69%, to 1468.36, and the

Nasdaq Composite

dropped 22.18 points, or 0.83%, to 2652.28.

The decline capped a year that was a roller-coaster ride for the markets amid the housing slump and credit meltdown. Still, for all of 2007, the Dow gained 6.4% and the S&P 500 rose 3.5%, both hampered by a weak fourth-quarter performance. The Nasdaq was the best performer, climbing 9.8%.

For the fourth quarter, the losses were 4.5% on the Dow, 1.8% on the Nasdaq and 3.9% on the S&P.

"This year has been one wild ride, and it's finally over," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "People are thankful this year has passed, but next year will bring a whole new set of challenges. We still finished the year with gains, so it was still a decent year with a strong return."

Over the last two years, the Dow has added 23.8%, the Nasdaq has jumped 20.2% and the S&P 500 has climbed 17.6%. In the last five years, the Dow has rallied 59%, the Nasdaq has surged 98.7% and the S&P 500 is higher by 66.8%.

The markets will be closed for New Year's on Tuesday. Volume was thin ahead of the holiday, with 2.39 billion shares trading on the

New York Stock Exchange

and 1.40 billion changing hands on the Nasdaq. Decliners led advancers by roughly 9 to 7 on both venues.

The lone report on the economic docket came from the National Association of Realtors, which said existing-home sales rose 0.4% to an annualized rate of 5 million units last month, as expected. Still, sales were down 20% from a year ago.

The inventory of homes on the market fell 3.6% last month to a 10.3-month supply.

After initially falling in the wake of the housing data, the Philadelphia Housing Sector Index rallied 1.5%, paced by gains in

Beazer Homes

(BZH) - Get Report

and

Hovnanian

(HOV) - Get Report

.

U.S. Treasury prices were rising after the home sales report. The 10-year note rose 13/32 in price, yielding 4.03%. The 30-year bond added 24/32 in price to yield 4.45%.

Among corporate news,

Legg Mason

(LM) - Get Report

said late Friday it has decreased its exposure to structured investment vehicles, or SIVs, by half to 3.2% of its total liquid assets. The firm is expected to take a hit to its third-quarter earnings of $22.2 million, or 15 cents a share. Legg Mason rose $1.90, or 2.7%, to $73.15.

Elsewhere in financials,

Merrill Lynch

( MER) is in talks with Chinese and Middle Eastern sovereign wealth funds to sell another piece of the bank, according to a report in

The Observer

. After opening lower, shares of Merrill finished up 71 cents, or 1.3%, at $53.68.

Other lenders benefited from a mid-session reversal. On the Dow,

JPMorgan Chase

(JPM) - Get Report

and

American Express

(AXP) - Get Report

rose 0.9% and 2.3%, respectively.

Goldman Sachs

(GS) - Get Report

,

Citigroup

(C) - Get Report

, and

Bear Stearns

( BSC) were each higher by 0.5% or more.

Away from equities, oil dipped 2 cents to close at $95.98 a barrel. For the year, however, prices surged 57%.

The dollar held steady in the trading day against the world's major currencies, but still saw its second consecutive losing year.

Overseas markets also were mixed. Overnight in Asia, Hong Kong's Hang Seng added 1.6%. Among European bourses, London's FTSE 100 eased 0.3%, and the Paris CAC 40 was off 0.2%.