U.S. stocks sink with euro, extending loss streak - Market Watch

“It’s hard to be too optimistic right now because Europe looks like a mess,” said Michael Sheldon, chief market strategist at RDM Financial. Then, in the new year, investors will be faced with the U.S. presidential election, “which could be very contentious.”

Time to buy Germany

It it's time to buy Germany, crisis or no crisis, says MarketWatch columnist Charles Sizemore. Photo: Getty Images

Setting off the day’s hand-wringing over Europe, Italy’s borrowing costs rose to a euro-era record at a bond auction, and the euro EURUSD +0.03%  broke 11-month lows against the dollar.

“Investors are taking profits in an unsettled market, and gold is one area where they do have profits built up,” Sheldon added. Meetings of top European leaders last week also “were encouraging, but it seems over the past few months every time [they] meet, they overpromise and under deliver,” he said.

The Dow Jones Industrial Average DJIA -1.10%  fell 131.46 points, or 1.1%, to 11,823.48, with 23 of its 30 components on the decline, led by heavy-equipment maker Caterpillar Inc. CAT -0.09% , off 4.4%.

The S&P 500 Index SPX -1.14%  declined 13.91 points, or 1.1%, at 1,211.82, with energy falling the hardest and health-care lagging the least among 10 S&P industry groups, all of which closed lower.