U.S. stocks tumble on E.Z. pessimism; Dow Jones down 1.20%

U.S. stocks were sharply lower on Monday, as optimism was weighed by German comments dismissing hopes that a solution to the euro zone debt crisis could be found by the end of the week.

During early U.S. trade, the Dow Jones Industrial Average tumbled 1.20%, the S&P 500 index fell 1.15%, while the Nasdaq Composite index declined 0.87%.

German finance minister Wolfgang Schaeuble said that European governments will not resolve the region's financial crisis at the next EU summit scheduled for October 23. His comments confirmed earlier remarks by German Chancellor Angela Merkel saying that "the dream of resolving all problems at the EU summit" was impossible.

G-20 finance ministers and central bankers had urged European leaders on Sunday to come up with a plan within the week, after endorsing measures to avoid a Greek default, recapitalize European banks and enhance the euro zone's bailout fund.

Freeport-McMoRan Copper & Gold saw shares plummet 4.54%, after saying it halted copper and gold production on Monday at its giant Grasberg mine in Indonesia because of security fears and worker blockades. This was the worst supply disruption since a strike began one month ago.

Other mining companies added to losses, as shares in Alcoa, the world's third largest producer of aluminum, plunged 3.22% and 3M Company saw shares drop 1.80%.

Meanwhile, Wells Fargo saw shares sink 5.25% even after the bank said its profit jumped more than 20% as write-offs of bad loans declined while deposits gained.

Also in the financial sector, shares in Citigroup soared 3.03% after the firm reported stronger-than-expected earnings, while Bank of America and Goldman Sachs saw shares rise 1.13% and 0.66% respectively.

Citigroup's third-quarter earnings rose 68% from a year earlier, lifted by an accounting adjustment and continued strength in the bank's international operations.

Elsewhere, Kinder Morgan was one of Monday's top gainers, with shares surging 4.88% after striking a USD21 billion deal to buy rival El Paso, combining the two largest natural gas pipeline operators in North America. Shares in El Paso skyrocketed 22.41% after the deal.

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 dropped 1.63%, France’s CAC 40 tumbled 1.49%, Germany's DAX plummeted 2%, while Britain's FTSE 100 posted a 0.94% decline.

During the Asian trading session, Hong Kong's Hang Seng Index rallied 1.9%, while Japan’s Nikkei 225 Index jumped 1.5%.

Also Monday, official U.S. data showed that manufacturing conditions in New York State improved less-than-expected in October, remaining in negative territory for the fifth consecutive month.

Meanwhile, a separate report showed that U.S. industrial production rose in line with expectations in September.