Stocks climbed well off their worst levels Tuesday, but still lower for the third-straight day amid fears about the ongoing euro zone debt crisis and concerns over another recession.
All major averages posted their worst three-day start this month since Oct. 2008 and the S&P is on pace for the biggest quarterly loss since the fourth quarter of 2008.
The Dow Jones Industrial Average fell 100.96 points, or 0.90 percent, to end at 11,139.30, clawing back from its worst levels. Bank of America and JPMorgan led the blue-chip laggards.
The S&P 500 shed 8.73 points, or 0.74 percent, to close at 1,165.24. The Nasdaq slid 6.50 points, or 0.26 percent to finish at 2,473.83.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished near 37.
Most of the S&P sectors finished in the red, led by financials and industrials.
“We haven’t had anything positive to build on and no way to get momentum,” Gordon Charlop, managing director of Rosenblatt Securities told CNBC. “With the kind of information we’re getting and with the situation in Europe, there isn’t a lot for investors to get excited about.”
Banks in talks with state prosecutors to settle claims of improper mortgage practices have been offered a deal, according to the Financial Times.
The FT said the proposed settlement language also might release the financial institutions, which include Bank of America , JPMorgan Chase , Wells Fargo and Citigroup , from legal liability for wrongful securitization practices.
Nomura cut its price targets on a number of banks including BofA, Citigroup, JPMorgan and Goldman Sachs. In addition, Credit Suisse cut its estimates for Goldman Sachs and Morgan Stanley.
“The news of the day is obviously Europe,” Tres Knippa of LotusBrokerage.com told CNBC. “What worries me the most is that the IMF may pull the second round of funding to Greece and if that happens, Greece goes into default sooner rather than later and that news is going to cause some real turmoil in Europe over the short-term.”
European shares hit a two-year closing low, led by banks, as rising debt yields continued to spook investors.
Shares of European banks trading in the U.S. tumbled sharply including Credit Suisse , UBS and Barclays .
Italy is at the center of the euro zone attention, with doubts on whether the government can deliver a promised austerity package and trade unions threatening strikes as parliament debates the austerity measures.
Meanwhile, the Swiss National Bank decided to set a minimum exchange rate of 1.20 francs to one euro, in an attempt to curb the appreciation of the franc, which is hurting the nation's exports. The euro and the dollar soared against the Swiss francon the decision.
Among techs, Dell said it will partner with Baidu to develop tablet computers and mobile handsets, in an aim to target the Chinese market dominated by Apple's iPad. Meanwhile, Canaccord Genuity raised its price target on Apple to $545 from $515.
