1st LD Writethru: U.S. stocks decline after China cuts bank reserve ratio

U.S. stocks ended lower Monday after volatile trading, as China's central bank announced a cut in its reserve requirement ratio (RRR) for commercial banks by 0.5 percentage points.

The Dow Jones Industrial Average fell 123.47 points, or 0.74 percent, to 16,516.50. The S&P 500 lost 15.82 points, or 0.81 percent, to 1,932.23. The Nasdaq Composite Index was down 32.52 points, or 0.71 percent, to 4,557.95.

The move of the People's Bank of China (PBOC), the first of its kind this year, aims to "ensure reasonably ample liquidity in the financial system; guide a stable and appropriate growth in credit; and create a favorable financial environment for supply-side structural reform," said China's central bank Monday in a statement.

To boost economic growth, which in 2015 slowed to its lowest level in a quarter of a century, the central bank lowered the RRR five times last year.

Chinese shares ended sharply lower Monday before the PBOC's announcement. The benchmark Shanghai Composite Index plunged 2.86 percent to close at 2,687.98 points.

In Europe, German benchmark DAX index at Frankfurt Stock Exchange inched down 0.19 percent, while French benchmark index CAC 40 rose 0.90 percent.

On the U.S. economic front, following the highest average year for the index in nearly a decade, pending home sales declined to begin 2016 but remained slightly higher than a year ago, according to the National Association of Realtors Monday.

The Pending Home Sales Index decreased 2.5 percent to 106.0 in January from an upwardly revised 108.7 in December. Endit