Global stocks drop

NEW YORK - Broad stock declines in Europe and the United States dragged world equity markets lower on Monday, adding to a sell-off that has sent global stocks near 17-month lows.

The MSCI world equity index, which tracks shares in 47 countries, slipped nearly 1.3 percent as declines in U.S. and European markets offset modest gains in Asia overnight.

Wall Street's Dow Jones Industrial Average fell 506.71 points, or 2.1 percent, to 23,593.8. The S&P 500 lost 54.09 points, or 2.08 percent, to 2,545.86.

The Nasdaq Composite dropped 156.93 points, or 2.27 percent, to 6,753.73.

The Russell 2000 index of small-cap U.S. companies fell 2.3 percent, pushing the index into the 20 percent decline from its highs that signals a bear market.

'If Santa Claus doesn't turn up very soon, U.S. stocks may end this year in negative territory,” wrote Rabobank analysts as the Nasdaq remained the only benchmark in the black for the year, with the Dow and the S&P 500 down between 2 percent and 3 percent.

Some investors had hoped for a bounce back before the holidays, but any 'Santa Claus rally” has proved elusive so far.

Since 1950, Wall Street has rallied by an average 1.3 percent during the last five trading days of December, according to the Stock Trader's Almanac.

'Some investors whom we have spoken to had positioned themselves for a December rally and the path has been painful,” broker Bernstein said in a research note.