Stocks are closing at their lowest level so far in July on fresh fears that Europe's debt crisis will spread beyond Greece to much larger economies. Italy, Europe's third-largest economy, and Spain, its fourth-largest, could be sliding toward default.
The Dow Jones industrial average lost 151.44 points, or 1.2 percent, to close at 12,505.76.
The Standard & Poor's 500 index fell 24.31, or 1.8 percent, to 1,319.49.
The Nasdaq composite fell 57.19, or 2 percent, to 2,802.62.
For the year to date:
The Dow is up 928.25, or 8 percent.
The S&P is up 61.85, or 4.9 percent.
The Nasdaq is up 149.75, or 5.6 percent.