A sell-off on worries about the economy erased all of the year's gains in the S&P 500 index Tuesday, even after President Barack Obama signed a law to raise the country's debt limit and avoid a default on U.S. debt. The S&P 500 has fallen for seven straight days, its longest decline since October 2008.
Behind the sharp decline in stocks: A series of weak economic reports. Consumers cut their spending in June for the first time in nearly two years. Analysts had predicted a slight increase. Incomes also rose by the smallest amount since September, reflecting a weak job market.
The news comes a day after a surprisingly weak report on U.S. manufacturing. Last Friday, the government said the U.S. economy grew at the slowest pace in the first half of the year since the recession ended in June 2009.
The Dow Jones industrial average lost 265.87 points, or 2.2 percent, to 11,866.62.
The S&P 500 fell 32.89 points, or 2.6 percent, to 1,254.05.
The Nasdaq composite fell 75.37, or 2.7 percent, to 2,669.24.
For the week to date:
The Dow is down 276.62, or 2.3 percent.
The S&P is down 38.23, or 3 percent.
The Nasdaq is down 87.14, or 3.2 percent.
For the year to date:
The Dow is up 289.11, or 2.5 percent.
The S&P is down 3.59, or 0.3 percent.
The Nasdaq is up 16.37, or 0.6 percent.