U.S. stocks declined

U.S. stocks declined, trimming the biggest monthly advance since 1987 in the Standard & Poor’s 500 Index, on concern European leaders will struggle to raise funds to contain the region’s sovereign debt crisis. Stocks rose last week after European leaders agreed to expand the region’s bailout fund and American economic growth accelerated. China can’t play the role of “savior,” the official Xinhua news agency said yesterday, as investors awaited the country’s response to Europe’s request for money to boost its bailout fund. Japanese Finance Minister Jun Azumi said today the government took unilateral steps to weaken the yen. Group of 20 leaders will gather Nov. 3-4 in Cannes, France, while central bankers from Australia, the U.S. and Europe will hold interest- rate policy meetings this week.

The Institute for Supply Management-Chicago Inc. said today its business barometer decreased to 58.4 in October from 60.4 the prior month. A level of 50 is the dividing line between expansion and contraction. Economists forecast the gauge would drop to 59, according to the median of 55 estimates in a Bloomberg News survey. Projections ranged from 56 to 62.5.

Dow 12,076.22     -154.89        -1.27%, Nasdaq       2,707.84       -29.31 -1.07%, S&P 500    1,267.85         -17.24 -1.34%

European stocks slumped, paced by losses in banks, as Italian and Spanish bonds declined. Morgan Stanley fell 5.2 percent to $18.30. Citigroup dropped 4.6 percent to $32.59.

MF Global Holdings Ltd., the holding company for the broker-dealer run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy after making bets on European sovereign debt.

Alcoa, the largest U.S. aluminum producer, dropped 5.4 percent to $10.95. Caterpillar erased 2.2 percent to $94.71.

Yahoo! decreased 4.9 percent to $15.75. The Asian asset sale is emerging as the most likely option for Yahoo and would let the Internet company eventually pay a special dividend or buy back shares, according to five people familiar with the situation, who declined to be identified because the talks are private.

Chevron Corp. erased 3.2 percent to $106.15 after being cut to “neutral” from “buy” at Bank of America Corp., which cited valuation concern.

SanDisk Corp., the biggest maker of flash-memory cards, lost 4.4 percent to $51.02. Sterne Agee & Leach Inc. downgraded its recommendation for the shares to “neutral” from “buy.”