Stocks fell sharply after a late selloff Monday after a report showed consumer credit rose slightly.
Stocks had zig-zagged throughout the session as the market remained jittery. Industrials, financials and tech were the weakest links.
The Dow Jones Industrial Average lost 115.48, or 1.2 percent, to close at 9,816.49, its lowest close since November 2009.
This came after the Dow slipped below 10,000on Friday and into correction territory (down more than 10 percent from its recent high)after the May jobs report fell well short of expectations, rattling a market already jittery after Hungary warned of a possible default.
The S&P 500shed 1.4 percent, while theNasdaq lost over 2 percent. The CBOE volatility index, widely considered the best gauge of fear in the market, was above 36 at the closing bell.
"You would normally see a bounce following a selloff like we saw on Friday, but the lack of any real direction today shows the market remains unconvinced that all the issues have been worked out," said Alan Gayle, senior investment strategist at RidgeWorth Investments.
Consumer credit rose by $955 millionin April, only the second rise in the past 15 months.
Worries about Europe also nagged at the market as an EU official said Spain and Portugal need to make more cuts and reform measures to fix their economies. This came after Hungary rattled the market last week, warning of a potential default of its own.
One bit of good news on the euro front today: German industrial orders rose more than expectedin April.
The dollar rose against the euro, which fell below $1.19 for the first time in more than four yearsbut recovered most of its losses.
Goldman Sachs slipped as the brokerage was subpoenaed by the FCICafter failing to comply with a request for documents and interviews.
Bank of America shares skidded after Rochdale analyst Dick Bove cut his price target on the stockto $22.80 from $27.50.