Stocks eased off their worst levels, but still finished lower in another thin, volatile session Thursday as investors sifted through a handful of headlines from the euro zone and after the S&P breached a key technical level.
The Dow Jones Industrial Average fell 134.86 points, or 1.13 percent, to end at 11,770.73.
Most Dow components closed lower, led by Alcoa and JPMorgan .
The S&P 500 dropped 20.76 points, or 1.68 percent, to finish at 1216.15, breaking below a key technical level of 1,225. The Nasdaq declined 51.62 points, or 1.96 percent, to close at 2,587.99.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, jumped above 34.
All 10 S&P sectors finished firmly in the red, led by energy and materials.
“This [selloff] seems to be much more technical,” said Kenny Polcari, managing director of ICAP Equities. “The S&P tested the 1,225 level and they couldn’t hold, so we broke through…1,200 is the next level, which is the 50-day moving average.”
The euro zone and IMF officials have discussed the idea of the ECB lending to the IMF, to provide the fund with sufficient resources for bailing out even the biggest euro zone sovereigns, according to officials.
"Some discussions on this have taken place...It could be one way of getting around the legal restrictions on the ECB," one official with knowledge of the talks said.
Meanwhile, Hungary said it would start talks with the IMF on a possible new deal, but the Fund said it had not received any requests for a new loan program.