Stocks fell on Monday as jitters about euro zone debt bailouts, including more financial reforms by Greece, and doubts about the pace of global growth encouraged investors to shed riskier assets.

A gauge of manufacturing in New York State tumbled much more than expected in May to its lowest level in five months, the New York Federal Reserve said in a report, further souring investor sentiment.

In deal news, shares of NYSE Euronext fell 10.1 percent to $36.77 after Nasdaq OMX Group Inc and IntercontinentalExchange withdrew their bid for the rival exchange.

The issue about Greece and the drop in commodity prices are raising many questions. Is the expansion over and will the European debt crisis be resolved? said John Canally, investment strategist for LPL Financial in Boston.

The Dow Jones industrial average <.DJI> was down 54.64 points, or 0.43 percent, at 12,541.11. The Standard & Poor's 500 Index <.SPX> was down 6.53 points, or 0.49 percent, at 1,331.24. The Nasdaq Composite Index <.IXIC> was down 16.36 points, or 0.58 percent, at 2,812.11.

Meeting on Monday, euro zone finance ministers are likely to back a bailout package for Portugal, with new conditions set by Finland. During the meeting euro zone officials were expected to pressure Greece to announce more austerity steps to secure further emergency funding.

International Monetary Fund Managing Director Dominique Strauss-Kahn is due to appear in court in New York after being arrested on Sunday on charges of attempted rape of a hotel maid. The case sent shock waves through French political circles and left the IMF in turmoil.

In earnings news, shares of J.C. Penney Co Inc rose 6.3 percent to $40.88 after the company reported a higher quarterly profit.

But Lowe's Cos reported weaker-than-expected quarterly results and cut its forecast for the year, sending shares down 3.3 percent to $24.91.

(Reporting by Angela Moon, Editing by Kenneth Barry)