New York - US stocks posted heavy losses on Monday, following the lead of other major indices around the globe as investors appeared to grow wary of the signs of economic optimism.

US investors pulled back after a 5.8-per-cent fall in China's Shanghai Composite Index, its largest percentage drop since November. The DJ Euro Stoxx 50 index dropped 2.46 per cent.

The stock sell-offs came despite news that Japan's economy has pulled out of recession, growing 0.9 per cent in the second quarter. That followed similar returns to growth in Germany and France last week. The United States by contrast shrank 1 per cent over the same period.

Financial shares, metals and raw materials manufacturers led the US declines. Many investors retreated to Treasuries - the yield on US government debt dropped to its lowest in nearly a month.

The blue-chip Dow Jones Industrial Average tumbled 186.06 points, or 2 per cent, to close at 9,135.34. The broader Standard and Poor's 500 Index plunged 24.36 points, or 0.43 per cent, to 979.73. The technology-heavy Nasdaq Composite Index plummeted 54.68 points, or 2.75 per cent, to 1,930.84.

On currency markets, the dollar slipped against the euro to 70.04 euro cents from 70.41 euro cents on Friday and fell against the Japanese currency to 94.46 yen from 94.94 yen.(dpa)