A late swoon for stocks erased all the previous session’s gains, underscoring that investors’ fears about Europe’s credit crisis and tighter rules on Wall Street haven’t abated quite yet.

Financials led a decline that spread across every sector, though volume lightened considerably. Traders said that paved the way for additional volatility late in the day as a relatively small number of participants had an outsized effect on the major averages.

The Dow Jones Industrial Average slid 126.82 points, just barely erasing Friday’s 125-point rally. The blue-chip measure was off 1.2% on the day to 10066.57, led by declines of more than 3.5% each in Bank of America and J.P. Morgan Chase. Only one Dow component managed a daily gain—Home Depot, which climbed 0.6%.

(Read More: WSJ)