* Top official says Cyprus is new template for euro zone fixes
* Stocks wipe out gains after initial optimism over Cyprus bailout
* Dell says two new proposals could be superior to take-private deal
* Apollo Group rallies after results beats estimates
* Indexes down: Dow 0.3 pct, S&P 0.1 pct, Nasdaq 0.2 pct
NEW YORK, March 25 (Reuters) - U.S. stocks fell on Monday as initial optimism over a bailout for Cyprus gave way to investor worries that the euro zone would shift the burden of aiding weak banks to depositors, bondholders and others instead of to governments and taxpayers.
The Cyprus deal was previously called a one-time solution to debt problems, but investors grew cautious after Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times that the Cyprus bailout deal could be a new template for resolving euro zone banking problems.
The Dutch finance minister said if banks needed restructuring and were unable, then euro zone officials would turn to shareholders, bondholders and uninsured depositors to contribute to a bank rescue.
The approach described by Dijsselbloem would be a radical departure for euro zone policy after three years of crisis in which taxpayers across the region have effectively been on the hook for resolving problem banks and indebted governments.
"The fire in Europe hasn't been completely put out, though it has been tapered," said John Carey, portfolio manager at Pioneer Investment Management in Boston.
Reacting to Dijsselbloem, Carey added, "There would be some unease if these problems persisted or got out of control."
The deal between Cyprus and the heads of the European Union, the European Central Bank and the International Monetary Fund will spare the Mediterranean island a likely banking collapse by winding down the largely state-owned Popular Bank of Cyprus and shifting deposits below 100,000 euros to the Bank of Cyprus to create a "good bank."
Uninsured depositors in the Bank of Cyprus will have their accounts frozen while the bank is restructure and recapitalized.
Banking shares were among the ones hurt most by the Dijsselbloem comments. Shares of Morgan Stanley fell 1.3 percent to $21.88 while Bank of America dropped 0.9 percent to $12.44.
The Dow turned lower after hitting another all-time high, while the S&P 500 fell from levels that took it within a point of its all-time closing high.
The Dow Jones industrial average was down 44.46 points, or 0.31 percent, at 14,467.57. The Standard & Poor's 500 Index was down 1.86 points, or 0.12 percent, at 1,555.03. The Nasdaq Composite Index was down 5.56 points, or 0.17 percent, at 3,239.44.
At its session high, the Dow climbed above 14,547, its highest ever, while the S&P was within one point of its closing record of 1,565.15 set in October 2007.
The S&P has risen for 10 of the past 12 session, with both negative weeks extremely slight, dipping less than 0.3 percent in each, a sign that market momentum continues to be to the upside.
Red Hat Inc fell 4.8 percent to $48.38 after Jefferies cut its price target on the stock.
United Therapeutics Corp dropped 2.4 percent to $59.46 after it said the Food and Drug Administration had rejected its oral drug to treat hypertension for a second time.
Dell Inc said it received alternative proposals from Blackstone and billionaire investor Carl Icahn that could be superior to the $24.4 billion offer from founder Michael Dell and private equity fund Silver Lake Partners last month. Dell shares rose 2.8 percent to $14.53.
Merger and acquisition activity has been another of the reasons for the stellar performance of stocks so far this year.
University of Phoenix owner Apollo Group rose 7.2 percent to $18.26 after it reported a better-than-expected profit even as student sign-ups fell for the fourth straight quarter. The stock was the biggest percentage gainer on the S&P 500.