Updated from 4:04 p.m. ESTStocks on Monday erased the previous session's rebound, with all the major indices closing at new lows for the year, as the latest round of terrorism jitters diverted traders' attention from more positive Wall Street stock research and some encouraging economic news. The Dow lost 137.19 points, or 1.3%, to 10,102.89 a three-month low; the S&P 500 was off 16.14 points, or 1.4%, to 1104.43; and the Nasdaq dropped 45.53 points, or 2.3%, to 1939.20, as all three indices fell for the fifth time in six sessions. The latest decline put the S&P 0.6% below where it started the year, while the Dow and the Nasdaq are both down 3% in 2004. Volume on the New York Stock Exchange reached over 1.5 billion, while over 1.7 billion shares changed hands on the Nasdaq. Decliners outnumbered advancers by about 7 to 2 on both exchanges. "On Friday, I think we saw a lot of short-covering, which took us flat into the weekend, and now we're a little over-extended," said Todd Leone, head of listed stock trading at SG Cowen. "The terrorist fears after the incident in Spain last week put a little damper on the market today, and we're seeing a little selloff, but I don't think people are going to do too much before the Fed meets tomorrow. Wednesday and Thursday could be very volatile days." The Federal Open Market Committee will meet at 9 a.m. Tuesday for the second time this year to discuss monetary policy. Any policy changes will be announced around 2:15 p.m. EST. The government's disappointing February employment report, released two weeks ago, all but ended speculation that the Fed would raise the federal funds rate above its current level of 1% any time soon, but the central bank's accompanying policy statement may say something new about the pace of economic growth and the labor market.