NEW YORK, Oct 4 (Reuters) - S&P 500 short-term technical indicators showed a sell signal on Monday as the benchmark index fell over 1 percent after a brokerage downgrade of Microsoft and new capital rules set by Switzerland revived worries about the European banking system.
* The index's 10-day momentum line fell below zero, indicating a short-term trend reversal, while the trend lines of the moving average convergence-divergence (MACD) indicator crossed at oversold levels.
* The Dow Jones industrial average dropped 100.36 points, or 0.93 percent, to 10,729.32. The Standard & Poor's 500 Index dropped 12.17 points, or 1.06 percent, to 1,134.07. The Nasdaq Composite Index dropped 33.70 points, or 1.42 percent, to 2,337.05. (Reporting by Edward Krudy; Editing by Kenneth Barry)