Stocks suffered their worst day in nearly a month on Monday as concern about the stalemate in U.S. budget talks and growing debt problems in the euro zone prompted investors to hedge against further losses.
The S&P 500 dropped nearly 2 percent on concerns that Europe's debt crisis would spread to Italy. European officials were still struggling to solve Greece's fiscal problems as Italy's markets have been roiled by worry about its banks.
"Today's decline is not necessarily the start of a correction, but suggests we are in for a wild ride this week,"
said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research in Austin, Texas.
The euro zone's woes added another layer of uncertainty to the stock market already rattled by Friday's exceptionally weak jobs report.
"What's happening today is something that should have happened on Friday. The disappointing jobs report on Friday on top of all the concerns on budget talks and Europe" have prompted the sell-off, Frederick said.
While investors still consider it unlikely there will be no deal on the debt, the lack of resolution at a time of growing international concerns weighed on sentiment. The CBOE Volatility Index (Chicago Options:^VIX - News) or VIX, Wall Street's barometer of investor anxiety, spiked 15.3 percent.
Dow Jones Industrial Average
(DJI: ^DJI )| Index Value: | 12,505.76 |
|---|---|
| Trade Time: | 4:02PM EDT |
| Change: |  151.44 (1.20%) |
| Prev Close: | 12,657.20 |
|---|---|
| Open: | 12,655.62 |
| Day's Range: | 12,470.30 -12,655.84 |
| 52wk Range: | 9,915.73 -12,928.50 |
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