Stocks closed broadly lower Wednesday as the dollar jumped following worries over the exacerbating Greek debt situation and after a handful of dismal economic news.
The Dow Jones Industrial Average plunged 178.84 points, or 1.48 percent, to close at 11,897.27. All 30 stocks finished lower, led by BofA, Alcoa and Home Depot .
The blue-chip index has declined almost 5.5 percent since the beginning of the month. Since 1950, the Dow has been down more than 5 percent halfway into a month 30 times. When that happened, the index almost always finished in the red for the month.
And if the Dow does finish down this month, it will be its first back-to-back monthly declines since May/June 2010.
The S&P 500 slumped 22.45 points, or 1.74 percent, to end at 1,265.42, while the Nasdaq fell 47.26 points, or 1.76 percent, to finish at 2,631.46.
All three major indices saw their biggest one-day drop since June 1. Materials, energy and financials led the sector laggards.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, surged almost 17 percent to trade above 21—its highest level since mid-March.
"Stocks are likely to be lower at the end of the year than they are now," David Levy, director and chairman of the Jerome Levy Forecasting Center told CNBC, adding that stocks have not priced in the "true nature of the danger" from the European debt situation or the coming slowdown.
Stocks tumbled amid increased turmoil on the Greece's debt situation, after euro zone officials failed to forge a Greek aid deal. Thousands of rioters gathered in Athensto protest government cutbacks required to avoid a default. Euro zone ministers will meet again next week to try to find an agreement. (Read More: Why Greece Is Not the Next Lehman)
Greek Prime Minister George Papandreou said he will form a new government on Thursday and seek a vote of confidence from his parliamentary group.
Meanwhile, Moody's warned it may downgrade two Portuguese banks amid ongoing funding worries. Earlier today, the ratings agency cautioned France's top three banks, due to their exposure to Greece's debt crisis.