NEW YORK (AP) -- U.S. stocks slumped Monday, and banks took the biggest losses. Deutsche Bank plunged as investors worried about the financial health of Germany's largest bank. Pfizer pulled drugmakers down after it announced it won't break up into two companies.
Stocks fell for the second day in a row. Banks were hurt by a drop in bond yields, which means lower interest rates and smaller profits on loans. Consumer companies fell as home improvement retailers were affected by a slowdown in sales of new homes.
European banks tumbled after the German magazine Focus said Deutsche Bank won't get a government bailout if it asks for one. Its report, published Friday, cited "government circles" as its source.
"There's some stress in the banking industry there, and questions about whether governments have the will to step in," said Steve Chiavarone, associated portfolio manager for Federated Investors.
The Dow Jones industrial average lost 166.62 points, or 0.9 percent, to 18,094.83. The Standard & Poor's 500 index fell 18.59 points, or 0.9 percent, to 2,146.10. The Nasdaq composite dropped 48.26 points, or 0.8 percent, to 5,257.49. Stocks are coming off two weeks of solid gains, and the Nasdaq set all-time highs twice last week.
Focus' article, published Friday, also said the German government won't help the Deutsche Bank by intervening with U.S. officials who want it to pay $14 billion to end an investigation into its sale of mortgage-backed securities. The bank's U.S.-listed shares tumbled 90 cents, or 7.1 percent, to $11.85. The stock is down 51 percent this year.
Other banks also tumbled. Goldman Sachs took the largest loss among Dow stocks and sank $3.65, or 2.2 percent, to $161.48. Citigroup shed $1.26, or 2.7 percent, to $45.89.
Bond prices rose. The yield on the 10-year U.S. Treasury note fell to 1.58 percent from 1.62 percent. That also affects banks, as lower bond yields mean lower interest rates and smaller profits on lending.
Stocks overseas also weakened. The DAX in Germany dropped 2.2 percent and France's CAC 40 fell 1.8 percent. In Britain, the FTSE 100 was down 1.3 percent. Japan's benchmark Nikkei 225 edged down 1.3 percent. South Korea's Kospi slipped 0.3 percent and Hong Kong's Hang Seng lost 1.7 percent.
Home Depot and Lowe's sank after the government said sales of new homes fell almost 8 percent in August. That followed a big jump the month before. While sales of new homes have risen over the last year, there simply aren't a lot of houses on the market.
Home Depot shed $2.34, or 1.8 percent, to $125.45 and Lowe's fell $1.54, or 2.1 percent, to $70.81.
Pfizer, one of the largest drug companies in the world, traded lower after it said it will not split into two smaller companies. Some of its investors had supported that plan in the hope it would bolster the value of their stock and accelerate growth, but lately the Viagra maker has been signaling that it probably wouldn't break up. Its stock fell 62 cents, or 1.8 percent, to $33.64.
Oil prices bounced higher as investors monitor a meeting of oil producers in Algeria. Benchmark U.S. crude rose $1.45, or 3.3 percent, to $45.93 a barrel in New York. Brent crude, the international benchmark, rose $1.46, or 3.2 percent, to $47.35 a barrel in London. Oil exploration companies rose the most. Transocean climbed 42 cents, or 4.6 percent, to $9.52 and Noble Energy added 60 cents, or 1.8 percent, to $33.62.
Specialty chemicals maker Chemtura climbed after it agreed to be bought by Germany's Lanxess. Lanxess is paying $33.50 per share for Chemtura, a 19-percent premium, and the companies valued the deal at $2.5 billion. Chemtura stock gained $4.46, or 15.8 percent, to $32.64.
Several companies started the week with deal news. CBOE Holdings, the parent company of the Chicago Board of Exchange, will buy stock exchange operator Bats Global Markets. The companies valued the deal at $3.2 billion, or $32.50 in cash and stock per share of Bats. Bats stock jumped 20 percent Friday as investors hoped that a deal was imminent, and it fell $1.45, or 4.6 percent, to $30.35. CBOE stock lost $3.71, or 5.3 percent, to $66.59.
Casual clothing retailer Lands' End skidded after the departure of its CEO. Federica Marchionni left Dolce & Gabbana to join Lands' End less than two years ago but was unable to stop a decline in sales. Lands' End stock lost $2.54, or 14.1 percent, to $15.46.
The dollar slid to 100.34 yen from 101.09 yen. The euro rose to $1.1255 from $1.1231.
Gold edged up $2.40 to $1,344.10 an ounce. Silver dipped 21 cents to $19.60 an ounce. Copper stayed at $2.20 a pound.
In other energy trading, wholesale gasoline gained 3 cents to $1.40 a gallon. Heating oil rose 4 cents, or 3 percent, to $1.45 a gallon. Natural gas added 4 cents to $3 per 1,000 cubic feet.