S&P Logs Worst Day in 3 Months; Apple Falls 2%

Stocks closed at session lows Tuesday, with the S&P 500 logging its worst day in three months, as concerns about global growth and mounting fears over Spain overshadowed initial enthusiasm over some upbeat economic reports.

The S&P 500 posted its fourth-straight day in the red, breaking below the widely-watched 1,450 level.

The Going Gets Tough...

The Dow Jones Industrial Average slumped 101.37 points, or 0.75 percent, to end at 13,457.55, logging its first triple-digit loss in nearly a month, led by Caterpillar and H-P .

The S&P 500 shed 15.30 points, or 1.05 percent, to finish at 1,441.59. The Nasdaq fell 43.05 points, or 1.36 percent, to close at 3,117.73.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, jumped above 15. (Read More: Uber Bear Sees S&P at 800...Just Not Yet)

All 10 S&P sectors finished in the red, led by techs and materials.

Growing worries over Spain's funding problems put a damper on earlier gains. Thousands of Spanish demonstrators protested in Madrid as the government prepares a new round of unpopular austerity measures for the 2013 budget that will be announced later this week. (Read More: Catalonia—The Next Independent State in Europe?)

And coinciding with the market's initial pullback around midday, Philadelphia Federal Reserve President Charles Plosser said the central bank's QE3 or lower unemployment.

However, Brian Battle of Performance Trust Capital Partners said debate is already "priced in."

"Plosser and [Federal Reserve Bank of Dallas President Richard] Fisher have been clear that [QE3] will not be effective...but the fact is that their dissenting makes no difference."

Stocks gained this morning following a batch of positive economic reports.

"Fundamental numbers don’t really matter right now," said Battle. "With an 8-percent unemployment rate and major companies downgrading prospects for future growth, that tells me that stocks should be lower...I don’t think we’re going to react much to economic news."

Caterpillar declined after the construction and mining equipment maker , citing the slower-than-expected growth in the global economy. (Read More: What Caterpillar's Warning Means for Global Growth)

The news follows lowered outlooks by transportation companies FedEx and Norfolk Southern in recent weeks.

Facebook fell for a second day following a weekend report from Barron’s that the stock remains overvalued.

Apple also dropped for a second session.

Advanced Micro Devices tumbled to hit a 52-week low after FBR Capital Markets cut its price target on the chipmaker from $7.50 to $6, and also lowered its guidance for the company. Other semiconductor stocks including Texas Instruments and Micron also declined.

Google reversed earlier gains to close lower. The search-engine giant hit an all-time high above $760 a share earlier in the session. (Read More: )

Meanwhile, Research In Motion bucked the trend, gaining more than 4 percent after the smartphone maker's CEO said the company added about 2 million subscribers over the last quarter. Still, shares of the BlackBerry maker have struggled over the last year, plunging more than 50 percent year to date.

Staples slumped after the office products retailer said it is speeding up the closure of some of its stores in the U.S. and Europe.

Barnes & Noble said it is this autumn for its Nook e-books and device business.

On the economic front, home prices in July, according to the S&P/Case Shiller composite index of 20 metropolitan areas. Also, home prices rose for the seventh straight month in July, according to the Federal Housing Finance Agency's monthly home-price index. (Read More: Is Housing Risen From Ashes? 'The Industry Has Come Back')

Adding to economic optimism, consumer confidence bounced to its in September, according to the Conference Board.

after the government auctioned $35 billion in 2-year notes at a high yield of 0.273 percent and a bid-to-cover of 3.60.

By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

WEDNESDAY: Weekly mortgage apps, new home sales, oil inventories, 5-yr note auction
THURSDAY: Durable goods orders, GDP, jobless claims, pending home sales, 7-yr note auction, farm prices; Earnings from Discover Financial, Nike, Accenture, Research In Motion, Micron
FRIDAY: Personal income & outlays, Chicago PMI, consumer sentiment; Earnings from Walgreens

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