Stocks retreated on Monday and the Nasdaq fell more than 1 percent as a sell-off in technology shares overshadowed gains in banks after reports that Washington could end up with a big stake in Citigroup common stock.

Large-cap technology companies led the Nasdaq lower, including Apple , which fell more than 2 percent. The declines reversed an earlier bounce fueled by gains in financials. Citigroup Inc is in talks to give the U.S. government a larger stake, a person familiar with the matter said.

The Dow Jones industrial average <.DJI> was off 9.64 points, or 0.13 percent, to 7,356.03. The Standard & Poor's 500 Index <.SPX> lost 3.20 points, or 0.42 percent, to 766.85. The Nasdaq Composite Index <.IXIC> gave up 17.39 points, or 1.21 percent, at 1,423.84.

(Reporting by Leah Schnurr; Editing by James Dalgleish)