The euro plunged to a three-month low against the U.S. greenback and a roughly two-week trough versus the yen.
All major banks were sharply lower across the board, including Credit Suisse and Morgan Stanley.
(Read More: What You Need to Know About Cyprus: El-Erian)
"Don't look for a catalyst or a news event to be the tipping point for a meaningful pullback or correction," wrote Elliot Spar, market strategist at Stifel Nicolaus. "I continue to believe it will come from the technical side in the form of an increasing number of negative divergences, an increasing number of consecutive days of lagging NYSE breadth or a key reversal day in the major averages."
On the economic front, the homebuilder sentiment index declined to 44 in March from 46 in the month prior, according to the National Association of Home Builders, falling to the lowest level in five months. Economists polled by Reuters expected a gain to 47. A reading below 50 indicates more builders view market conditions as poor than favorable.
Shares of homebuilders including Ryland and Beazer fell following the report.
The Federal Reserve is scheduled to hold a two-day meeting later this week and investors will be watching for any signs that the central bank could start winding down its quantitative easing program. The Fed's meeting will culminate with the release of its policy statement, economic forecasts and a press briefing by Fed Chairman Ben Bernanke on Wednesday afternoon.
(Read More: Super Wednesday for World's Central Banks)
JCPenney surged to lead the S&P 500 gainers after ISI Group said the retailer has the to move to a REIT-like entity, saying the company's top 300 stores could generate approximately $1.2 billion in sublet income providing a valuation of nearly $40 a share.
Schlumberger tumbled after the oilfield services company warned that North American activity was coming in lower than expected in the first quarter, as fewer rigs were going back to work than it had expected.
Verizon gained after the company was upgraded to "buy" from "neutral" at Citigroup, which now sees the telecommunications firm executing a buyout of Vodafone's stake in Verizon Wireless that provides tax efficiency for Vodafone and earnings accretion for Verizon.
Hewlett-Packard rallied to lead the Dow gainers after Morgan Stanley upgraded the tech firm to "overweight" from "equal weight," citing positive momentum in both free cash flow and earnings, which will accelerate the timing of cash being returned to investors.
