Stocks tumbled on Friday after a surprise move by China to increase bank reserve requirements raised worries about the impact of monetary tightening on global growth, weighing on commodity prices and resource shares.

The hike in reserve requirements comes on the heels of a similar increase last month and raised worries that the pace of monetary tightening in China could be more swift than expected.

We see the tightening on China's side is going to be ratcheted up, which removes liquidity from the U.S. equity market, said Steven Grasso, director of institutional sales at Stewart Frankel and Co Inc in New York.

If we were all betting on the recovery story, that recovery might be delayed.

The news boosted the U.S. dollar and pressured commodity prices and resource stocks. Crude oil futures fell about 2.5 percent to $73.37 a barrel, while Exxon Mobil Corp gave up 1 percent at $64.58.

The Dow Jones industrial average fell 126.29 points, or 1.24 percent, to 10,017.90. The Standard & Poor's 500 Index lost 11.63 points, or 1.08 percent, to 1,066.84. The Nasdaq Composite Index slipped 15.77 points, or 0.72 percent, to 2,161.64.

Shares of Ingersoll-Rand Plc slid 9 percent to $30.85 after it reported results that missed analysts' expectations as weak nonresidential construction hit demand for heating and cooling systems.

U.S. economic data showed a differing picture of recovery as consumer sentiment slipped in early February but business inventories fell unexpectedly in December and sales at retailers rose more than expected in January.

(Editing by Padraic Cassidy)