U.S. stocks tumbled Monday, as fresh worries over the progress of Europe's sovereign debt negotiations spurred a sell off that erased Friday's gains.

The Dow Jones Industrial Average lost 238 points, or 2%, to 11407, hitting a series of fresh lows in afternoon trading. The action followed a 166-point surge Friday that catapulted the Dow into positive territory for the year for the first time since Aug. 31.

U.S. Markets

Monday's loss pushed the Dow back into the red for the year. The Standard & Poor's 500-stock index shed 24 points, or 1.9%, to 1201 and the technology-oriented Nasdaq Composite declined 56 points, or 2.1%, to 2611. All S&P 500 sectors lost ground.

Materials and financial stocks led the index's decliners. Trading volume was relatively light, which market participants said exacerbated Monday's downward swing. Composite volume on the New York Stock Exchange was about 2.4 billion shares.

Monday's tone was cautious before the open of U.S. trading. European stocks turned negative after a representative for German Chancellor Angela Merkel said it will be impossible to resolve every sovereign-debt problem at a euro-zone summit Sunday.

Markets had risen earlier, after top European officials vowed to unveil a far-reaching sovereign-debt rescue plan by that date. The fresh European worries overshadowed deal making and U.S. corporate news.

Shares of El Paso surged 25% after the company agreed to be acquired by Kinder Morgan in a $21.1 billion cash and stock deal, which includes the assumption of about $16.7 billion in debt. The transaction creates North America's largest natural-gas pipeline network. Kinder Morgan gained 5.7%. Citigroup was off 1.1% despite the bank's adjusted third-quarter earnings, which came in slightly ahead of Wall Street's expectations.

European Stock Markets

European stock markets ended lower Monday after comments from euro-zone officials caused investors to reassess the Group of 20 industrial and developing nations' pledge to tackle the euro-zone debt crisis and as data failed to offer any evidence of an upturn in global economic growth.

Early gains couldn't be sustained and national indexes soon began their southward passage after German Finance Minister Wolfgang Schaeuble said the forthcoming European Union summit isn't a solution to the euro-zone debt crisis in and of itself.

Over the weekend, G-20 finance ministers had sought to reassure nervous investors with promises to ensure banks were adequately capitalized and would have access to funding. They also called for a comprehensive plan to tackle the European debt crisis to be announced at this weekend's European Union summit.

The Stoxx Europe 600 index lost 1%, closing at 236.22. Nationally, the U.K.'s FTSE 100 declined 0.5% to 5436.70, Germany's DAX was off 1.8% at 5859.43 and France's CAC-40 slipped 1.6% to 3166.06. Indeed, market participants were quick to caution that to date, meetings of euro-zone finance ministers have yielded little obvious progress and they questioned whether the current rally was sustainable.

Dolmen Securities said while the recent upward momentum in stocks has been fueled by cautiously optimistic CEO rhetoric, better than expected economic data, seller fatigue and optimism over a clean resolution to the European sovereign-debt crisis, a sustained run appeared unlikely.

Data from the U.S. appeared to add to investors' fears about stagnant growth in the world's largest economy, with industrial production registering only a weak increase in September. U.S. Empire State data had offered some positive signals as it came in at a negative 8.5 in October, better than a negative 8.8 in September.

Deutsche Bank said in a note that France's debt rating was under threat. We consider that the deterioration in economic conditions is now creating a distinct risk that France could be put under 'negative watch' by the rating agencies before the end of this year, the bank said.

Meanwhile, corporate news was mixed. Shares in G4S plunged 22% after the company acquired Danish business-services provider ISS A/S for GBP5.2 billion. Oil giant BP advanced 2.2%, after the company settled all claims with Anadarko Petroleum related to the Deepwater Horizon accident in 2010. Elsewhere, shares in Dutch electronics company Royal Philips lost 1.9% after it posted a slump in third-quarter net profit due to weak consumer demand and a challenging economic environment, especially in Europe.

Asian Stock Markets

Asian stocks ended mostly higher Monday, as investors turned more bullish on the back of positive U.S. economic data and signs of progress in Europe's sovereign-debt crisis. Finance ministers at the Group of 20 meeting over the weekend endorsed part of a developing plan by European leaders to avoid a Greek default, recapitalize Europe's banks and prevent contagion.

Japan's Nikkei Stock Average rose 1.5%, South Korea's Kospi climbed 1.6%, Hong Kong's Hang Seng Index gained 2%, while the Shanghai Composite added a more modest 0.4% after choppy trade. India's Sensex closed down 0.3%.

In Tokyo, heavily weighted exporters were broadly higher, helped by a weaker yen and eased concerns about a U.S. economic slowdown after a report from the U.S. Commerce Department Friday showed U.S. retail and food services sales rose 1.1% in September, outstripping forecasts. Sony rose 5%, Sharp added 2.8% and Advantest climbed 2.6%.

On the downside, Olympus tumbled 24%, extending Friday's 18% drop, on several brokerage-rating downgrades after its former chief executive, who was discharged last week, told The Wall Street Journal he had raised serious governance concerns with the company's chairman.

In Hong Kong, clothing retailer Esprit Holdings advanced 7.9%. A Monday report in Germany's Handelsblatt quoted the company's chief executive as saying Esprit could close its North American stores within roughly 12-18 months if it's unable to sell them.

Growth-sensitive resources shares were broadly higher across the region. Zijin Mining's Hong Kong and Shanghai shares added 4.7% and 0.2%, respectively. Tokyo-listed Sumitomo Metal Mining tacked on 5.4%, while Hindalco Industries added 1.1% in Mumbai afternoon trade. A recent rise in crude-oil prices sent many energy firms higher, with Inpex up 2.9% and Japan Petroleum Exploration adding 4.2% in Tokyo, while Cnooc gained 3.3% in Hong Kong. In Seoul, S-Oil jumped 8.9%, while Thai Oil gained 1.4% in Bangkok.

Commodities

Base metals closed mostly lower on the London Metal Exchange Monday after the euro sank and equity markets fell into the red amid fading hopes of a definitive solution to the euro zone's sovereign debt crisis. LME three-month copper ended the session at $7,494.50 a metric ton, down 0.7% on Friday's close.

The red metal had earlier traded as high as $7,660/ton, however the market's early morning rally was cut short after a spokesman for German Chancellor Angela Merkel said she considered the dream of resolving all problems at the euro-zone summit impossible.

Three-month nickel was the only base metal to end the day higher, while three-month lead suffered the largest losses within the complex and closed 2% lower at $1,985/ton. Crude futures settled lower Monday as fresh worries emerged about Europe's sovereign debt. Light, sweet crude for November delivery fell 42 cents, or 0.5%, to $86.38 a barrel on the New York Mercantile Exchange, after trading as high as $88.18 earlier in the session.

Brent crude for December delivery on the ICE futures exchange was down $2.45, or 2.2%, to $110.17 a barrel. The sharp decline cut into the premium for Brent against its U.S. counterpart West Texas Intermediate, which had increased to a new record of nearly $28 a barrel Friday.

Gold eased as commodities came under pressure from the view that the euro zone's debt crisis would drag on despite pressure from world finance ministers to come up with a comprehensive response to the financial turmoil there. The most actively traded contract, for December delivery, fell $6.40, or 0.4%, to $1,676.60 a troy ounce on the Comex division of the New York Mercantile Exchange.