SPAIN AND ITALY: Stocks closed at their lowest level yet this month on fresh fears that Europe's debt crisis would spread beyond Greece, Portugal and Ireland to the much larger economies of Spain and Italy. Spanish and Italian bank stocks plummeted.
U.S. ECONOMIC WOES: Traders couldn't shake concerns that began mounting on Friday when the government said hiring slowed to a crawl in June. That compounded fears that the U.S. economy was entering a prolonged slowdown, not just a soft patch. Stalled budget negotiations added to the uncertainty.
THE INDEXES: The Dow Jones industrial average lost 151 to close at 12,506. The Standard & Poor's 500 index fell 24 to 1,319. The Nasdaq fell 57 2,803.