Stocks kicked off the week with sharp losses, with all three major averages posting their worst one-day performance this year, amid renewed worries over Europe and as investors took a pause after the Dow topped 14,000 for the first time since October 2007 last week.

The Dow Jones Industrial Average [ .DJI 15354.40  +121.18 (+0.80%) ] dropped 129.71 points, or 0.93 percent, to close at 13,880.08, dragged by Travelers and Merck, after finishing above the psychologically-important 14,000 level for the first time since October 2007 last Friday.

The S&P 500 [ .SPX 1667.47  +17.00 (+1.03%) ] slumped 17.46 points, or 1.15 percent, to finish at 1,495.71. The Nasdaq [ .IXIC 3498.97  +33.72 (+0.97%) ] tumbled 47.93 points, or 1.51 percent, to end at 3,131.17. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, surged near 15.

All key S&P sectors finished in negative territory, led by financials and techs.

(Read More: What Could Trip Up the Stock Market Bulls? )

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