* Ireland gets bailout, investor jitters remain
* Euro hovers near two-month lows versus the U.S. dollar
* Retailers off after two-week climb
* Indexes down: Dow 1.2 pct; S&P 1 pct, Nasdaq 1.3 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to mid-morning trading)
By Rodrigo Campos
NEW YORK, Nov 29 (Reuters) - U.S. stocks fell more than 1 percent on Monday on lingering worries about Europe's ability to contain a credit crisis despite a weekend bailout agreement for Ireland.
The euro fell to more than two-month lows against the U.S. dollar, hurting commodity prices and shares in the materials and energy sectors.
European Union finance ministers endorsed an 85 billion euro loan package to help Ireland bridge its deficit. Nervousness that the credit crisis could spread to other euro zone members has weighed on global stocks in recent weeks. For details, see [ID:nLDE6AS08D]
Anxiety grew, with the CBOE Volatility index <.VIX>, Wall Street's so-called fear gauge, hitting its highest level since early October.
Adding to the fundamental weakness, the S&P 500 failed to hold a technical support as it briefly traded below its 50-day moving average for the first time since early September.
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To watch Reuters Insider report "Upside resistance for S&P 500 is 1,220 short term" click: http://r.reuters.com/vas57q
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"This seems to be more of a macro selloff based on fears of what's happening in Europe," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.
"A lot of people don't understand the ramifications here. If Europe is having these systemic problems, it brings the question of whether our economic recovery is put on hold."
The Dow Jones industrial average <.DJI> dropped 133.73 points, or 1.21 percent, to 10,958.27. The Standard & Poor's 500 <.SPX> lost 12.16 points, or 1.02 percent, to 1,177.24. The Nasdaq Composite <.IXIC> fell 32.11 points, or 1.27 percent, to 2,502.45.
The S&P materials index <.GSPM> declined 1.3 percent, while the energy sector <.GSPE> was off 0.8 percent.
U.S. consumers appeared to be spending again as about 212 million shoppers hit stores between the U.S. Thanksgiving Day holiday on Thursday and Sunday, an increase of 8.7 percent from 2009, according to a private survey. [ID:nUSHOLIDAY]
Still, the S&P retail index <.RLX> fell 1.2 percent after climbing 3.5 percent in the last two weeks.
Stifel's Mata said retail stocks had moved up in anticipation of positive weekend sales, and a selloff was expected.
Online retailer Amazon.com Inc