The Dow stock marker closed down on the first trading day after it reached 14,000 for the first time since the financial crisis.
Major indexes dived by the most this year, and the Dow Jones industrial average dropped as much as 143 points in afternoon trading. It closed down 129.71, or 0.9%, at 13,880.08.
The Standard & Poor's 500 index fell 17.46 points, or 1.2%, to 1,495.71. The Nasdaq composite index lost 47.93, or 1.5%, to 3,131.17.
The drops were the biggest this year for all three indexes. They followed a surge on Friday that pushed the Dow over 14,000 for the first time since 2007, before the financial meltdown that rocked world markets.
The index had closed on Friday just 155 points short of its record high, set in October 2007.
The rally was powered by solid economic data, including a January jobs report that showed the labour market is strengthening gradually. A broad measure of manufacturing also rose sharply.
The Dow is up nearly 6% this year, yet Wall Street's celebratory mood was a distant memory, as US stocks followed European markets lower. France's CAC-40 closed down 3%, Germany's DAX 2.5%.
"It started to look like things in the market are maybe getting a little ahead of themselves, compared to some of the data we've seen," said Bill Stone, chief investment strategist at PNC Asset Management Group. He said problems in Europe are also beginning to affect US markets after several quiet months.
Borrowing costs for Italy and Spain rose on Monday, he noted, reflecting concerns among bond investors that those countries may be unable to meet their financial obligations.
"It kind of restarts some of the old worries that we've been able to ignore for quite some time," he said.
In New York, Merck & Co. was among the Dow's biggest losers, dropping 98 cents, or 2.3%, to 40.85 dollars.
The pharmaceutical company said on Friday that its earnings declined in the fourth quarter and 2013 might be weaker than analysts had hoped.
Boeing was the only rising stock among the 30 in the Dow.
The euro fell to $1.3512. The yield on the 10-year Treasury note fell to 1.96% from 2.05% earlier in the day as demand for ultra-safe assets increased.
Oil prices drifted lower. Crude fell $1.60 to $96.17 a barrel in New York.