Stocks came off session lows, but still finished sharply lower Monday, as bank stocks slumped amid ongoing macroeconomic concerns and ahead of a big earnings week.
The Dow Jones Industrial Average tumbled 94.57 points, or 0.76 percent, to end at 12,385.16, clawing back from its intraday low of 12296.23.
Boeing and BofA were the biggest laggards. The blue-chip index is now on pace for its first three-month losing streak since Feb. 2009.
The S&P 500 fell 10.70 points, or 0.81 percent, to close at 1,305.44. The tech-heavy Nasdaq slid 24.69 points, or 0.89 percent, to finish at 2765.11.
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 finished in the red, 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 . Analysts from JPMorgan and Baird provided bullish earnings previews for the iPod maker ahead of the report on Tuesday afternoon. JPMorgan raised its earnings estimates on the firm from $5.55 to $6.58.
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