Stocks were off session lows in the final hour of trading Monday but were still lower, led by banks, amid ongoing debt concerns in Europe and the lack of progress in U.S. debt-ceiling negotiations.
The Dow Jones Industrial Average tumbled, led by Boeing and BofA , after ending higher on Friday, but finishing lower for the week. The blue-chip index was down more than 180 points at its session low and is now on pace for its first three-month losing streak since Feb. 2009.
The S&P 500 and the tech-heavy Nasdaq were also lower. The CBOE Volatility Index, widely considered the best gauge of fear in the market, jumped almost 10 percent to trade above 21.
All 10 S&P sectors were trading to the downside, led by financials and materials.
“Uncertainty has not gone away over the weekend,” said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research. “The markets are focusing on headline news again, and earnings have taken a backseat to what’s been going on.”
Detrick said he expects the S&P to continue trading in the current range.
Banks were under pressure with BofA, Goldman Sachs and JPMorgan hitting fresh 52-week lows. (Read More: Financial Stocks Hit 2011 Low) Citigroup also slipped after Barclays cut its price target on the bank to $55 from $60. BofA and Goldman Sachs are slated to report earnings Tuesday morning.
Italian banks skid across the board, with shares of UniCredit briefly halting earlier, amid investor concerns over the sovereign debt crisis and the cost it could have on the sector.
Tech stocks were also mostly in the red, with the exception of Apple .
Sandisk fell after Stifel Nicolaus cut its price target on the chipmaker to $63 from $72. Rivals Micron and Texas Instruments were also lower.
Neftlix slid after Pacific Crest Securities cut their rating on the video-streaming company to "sector perform" from "outperform."
LinkedIn also declined after JPMorgan downgraded their rating on the job-networking site to "neutral" from "overweight."
Meanwhile, Check Point gained after the Internet and network security provider