Stocks knocked by housing woes

NEW YORK (CNNMoney.com) -- A surprisingly weak read on new home sales sent stocks tumbling Monday morning, giving investors a reason to back track after last week's big rally.

The Dow Jones industrial average (down 103.02 to 12,377.99, Charts) lost nearly 0.9 percent more than 90 minutes into the session, while the broader S&P 500 (down 11.54 to 1,424.57, Charts) index lost 0.8 percent. The Nasdaq (down 18.45 to 2,430.48, Charts) composite lost almost 0.8 percent.

Stocks had been mixed at the open as investors eyed an upgrade of Dell and a run up in oil prices following last week's big rally.

But the mood turned sour following the 10:00 a.m. ET release of the February housing market report, which showed new home sales slowed to the slowest pace in more than six years.

That sent a variety of stocks tumbling, with all 30 Dow components lower, led by Alcoa (down $0.63 to $33.56, Charts), Honeywell (down $0.72 to $46.99, Charts) and 3M (down $0.89 to $77.08, Charts).

Stocks were mixed Friday at the end of an otherwise upbeat week on Wall Street, in which all three major gauges added at least 3 percent and the Dow saw its best one-week point gain since March 2003.

After such an advance, stocks were vulnerable Monday and the housing report fed into those vulnerabilities.

Also weighing on stocks Monday: the run up in oil prices.

U.S. light crude oil for May delivery added 71 cents to $62.99 a barrel on the New York Mercantile Exchange after the U.N. tightened sanctions against Iran amid ongoing worries about the nation's nuclear program.

In corporate news, Citigroup (down $0.40 to $51.32, Charts) is reportedly looking to cut 15,000 jobs, or around 5 percent of the workforce as part of a broader restructuring plan that could cost the bank $1 billion.

Dell (up $0.46 to $23.29, Charts) shares rose on a Goldman Sachs upgrade, Reuters reported. The investment bank raised Dell to "buy" from "neutral" citing a number of catalysts over the next 18 months.

Intel (down $0.17 to $19.10, Charts) said Monday that it will invest $2.5 billion to build a chip plant in China.

Treasury prices rallied after the housing news, lowering the yield on the 10-year note to about 4.56 percent from about 4.61 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and yen, giving up earlier gains.

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