Stocks slumped on Monday as technology stocks unraveled, and investors worried that continuing woes over the euro zone debt crisis could put a damper on the economic recovery.
The Dow Jones Industrial Average fell more than 35 points after fluctuating much of the session, following a volatile weekof currency and commodity swings that ended with blue-chips lower.
Microsoft led the blue-chip index lower, while AmericanExpress gained.
TheS&P 500 fell nearly three-quarters of a percent, while the tech-heavy Nasdaq slumped more than 1.5 percent, testing a low reached on May 4, according to Stifel Nicolaus.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 17.
The reason for Monday's drop in tech stocks wasn't clear, except that the sector is considered among the riskier in the market, and investors have been in a "risk off" mode since silver prices began tumbling more than two weeks ago. Health care, utilities and consumer staples—traditionally so-called defensive stocks—led the market higher on Monday, confirming the "risk off" trend.
"It's a continuation of what we were seeing," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
Detrick also notes that stock index futures and options will expire at the end of the week, and "expiration week," as it's known, hasn't been kind to stocks the last two years. While not likely a factor today, expiration week dynamics could cause pressure stocks later in the week, he said.
In 2009, the S&P 500 fell 4.99 percent during May expiration week, and in 2010, the market fell 4.23 percent, Detrick wrote in a research note.
Monday's drop in consumer discretionary stocks—down more than 1 percent for the session—will likely be temporary, says Doug Coté, chief market strategist at ING Investment Management, who expects the sector will benefit from monetary tightening by the Federal Reserve.
The sector is likely to gain as energy prices fall, and inflation concerns are subdued by the Fed, Coté said. The sector is already gaining momentum from increased consumer spending, evident in record levels of retail sales, he said.
"You want to be in consumer discretionary," Coté said.
Euro zone finance ministers met todayto discuss plans to bail out Portugal from a debt crisis and to discuss whether to extend funding for Greece. But the meeting was clouded by the arrest of International Monetary Fund chief Dominique Strauss-Kahn.
The dollar fell against a basket of currenciesdominated by the euro , which gained despite the IMF chief's arrest on sexual assault charges. Gold prices fell slightly, falling to $1,490.40, while silver fell 2.5 percent to $34.13.