Stocks fell about 1 percent on Thursday, tracking weakness in German and European shares and overshadowing Berkshire Hathaway's investment in Bank of America that lifted the beaten down financial sector.

The FTSEurofirst 300 <.FTEU3> index of top European shares fell 1.2 percent and Germany's DAX <.DGAXI> slumped 2 percent on trader talk a short-selling ban may be enacted in Germany, following other European nations. A German Finance Ministry spokesman told Reuters they are not planning a general short-selling ban.

Markets have been sensitive to developments in the euro zone region, given the area's persisting sovereign debt crisis and concerns about European banks' stability.

What is now pressuring stocks is this obviously out-of-character move that we saw in the German DAX. People are clamoring to find out what initiated that, said Marc Pado, U.S. market strategist, Cantor Fitzgerald & Co in San Francisco.

Apple Inc fell 1.7 percent to $369.92 a day after co-founder Steve Jobs resigned as chief executive, keeping the Nasdaq negative. Apple is also one of the biggest S&P 500 components.

Berkshire Hathaway Inc , Warren Buffett's conglomerate, will buy a big chunk of the lender's preferred shares for $5 billion. Bank of America, a Dow component, jumped 12 percent to $7.85, but was still down for the month. The KBW banks index <.BKX> rose 1.3 percent.

The Dow Jones industrial average <.DJI> slid 156.02 points, or 1.38 percent, at 11,164.69. The Standard & Poor's 500 Index <.SPX> was down 16.28 points, or 1.38 percent, at 1,161.32. The Nasdaq Composite Index <.IXIC> took off 38.33 points, or 1.55 percent, at 2,429.36.

(Editing by Jeffrey Benkoe)