Stock investors are facing the biggest test of their staying power since Wall Street’s rally began nearly a year ago.

Share prices slumped again Monday, driving the Dow Jones industrials below the 10,000 level for the first time since November, as investors pulled back amid worries about Europe’s government debt crisis and the U.S. economic recovery.

The Dow, which has fallen for four straight weeks, lost 103.84 points, or 1%, to 9,908.39, its lowest close since Nov. 4.

Traders said there was no rush for the exits Monday, but rather that potential buyers largely remained sidelined amid Europe’s financial tensions and nagging questions about the U.S. economy’s health.

“It’s a buyers’ strike,” said David Rovelli, head of stock trading at brokerage Canaccord Adams in New York.

The Dow’s drop below the 10,000 mark could discourage market optimists, some analysts said. The blue-chip index had managed to rally from a low of 9,835 on Friday to close at 10,012, suggesting that some investors and traders were drawing a line in the sand.

With Monday’s slide, some market indexes neared the point of a 10% drop from their recent highs. A pullback of that magnitude hasn’t occurred in key market gauges since stocks began their rebound from 12-year lows last March.

The New York Stock Exchange composite index, which fell 1% for the day, now is down 9.9% from its 15-month high reached Jan. 11. The Dow is down 7.6% from its recent high.

The question is whether a market drop exceeding 10% would attract bargain-hunters -- or whether it would encourage more investors to sell.

Joe Battipaglia, market strategist at investment firm Stifel Nicolaus & Co. in Yardley, Pa., said he was doubtful that the sell-off would hold in the 10% range, the threshold for a typical short-term “correction” in an ongoing bull market.

“At this point, people are thinking there’s no reason to come into the market,” he said.

Since the new year began, stock prices worldwide have been slammed in part by the latest turmoil in Europe. Mounting debt woes of several European countries, including Greece, Portugal and Spain, have raised the risk of a financial “contagion” that could spread worldwide, just as the failure of brokerage Lehman Bros. in 2008 quickly reverberated around the planet.

Bond investors have demanded ever-higher yields on Greek government bonds, reflecting doubts about the country’s creditworthiness as its budget deficit has soared. On Monday the yield on two-year Greek bonds rose to 6.63% from 6.39% on Friday and 3.71% three weeks ago.

By contrast, two-year U.S. Treasury notes yield a mere 0.77%.

Fear of contagion eased a bit in Europe on Monday. Yields pulled back slightly on Portuguese and Spanish bonds, and most European stock markets stabilized after heavy losses last week.

Still, nervousness about the financial sector was reflected in renewed selling of U.S. bank stocks, which led Wall Street’s slide. Financial issues in the Standard & Poor’s 500 index fell an average of 2.2% for the day.

The S&P index overall dropped 9.45 points, or 0.9%, to 1,056.74. The Nasdaq composite index was off 15.07 points, or 0.7%, to 2,126.05.

Europe’s problems aside, U.S. share prices have been undermined by nagging doubts about the economic recovery’s staying power.

Despite the government’s report last month that the economy grew at a 5.7% annualized rate in the fourth quarter -- and despite stronger-than-expected fourth-quarter earnings reports from many U.S. companies -- some investors worry that the rebound will fade this year.

Battipaglia noted that Federal Reserve Chairman Ben S. Bernanke was scheduled to testify before Congress on Wednesday. He is expected to outline the central bank’s plans to begin slowly tightening credit.

“Investors are starting to worry that some of the props holding up the economy are going away,” Battipaglia said.

But market bulls believe the economy has enough momentum to support stocks near current levels.

“I think this is a normal correction” in share prices, said Nick Sargen, investment chief at Cincinnati-based Fort Washington Investment Advisors, which manages more than $30 billion in assets.

“If the question is whether this is a sentiment shift or a fundamental shift, I think it’s a sentiment shift,” he said. “There’s nothing to tell me that the recovery is in jeopardy.”

tom.petruno@latimes.com