NEW YORK (Dow Jones)--U.S. stocks suffered steep losses as investors' concerns over the financial health of European governments triggered a flight to safer assets.
The Dow Jones Industrial Average dropped 130.78 points, or 1.05%, to 12381.26, with all but one component, McDonald's, in the red. Technology and energy stocks led the Standard & Poor's 500-stock index a slump of 15.91 points, or 1.19%, to 1317.36. The technology-oriented Nasdaq Composite lost 44.42, or 1.58%, to 2758.90.
In the absence of major U.S. earnings reports or economic data, investors focused on negative headlines from Europe, including a Standard & Poor's outlook cut on Italian debt and regional-election losses for Spain's ruling Socialist party.
"The Eurozone nations are walking a fine line," said Malcolm Polley, president and chief investment officer at Stewart Capital Advisors. Too much austerity could choke off spending and weaken the continent's economic recovery, he said, even as markets around the world, including in the U.S., demand that Eurozone countries get their debt burden under control.
Monday's selloff reflected the same investor risk aversion that drove a slump in crude-oil prices below $98 a barrel and a rally in the U.S. dollar versus major foreign currencies. Gold rose above $1,515 a troy ounce.
Slower May manufacturer data from China also spurred traders to dump commodity-heavy shares in tandem with the decline in metals and other commodities Monday.
Both the blue-chip index and the S&P 500 have slid for three straight weeks, marking their longest losing streak since August. Though lengthy, the slide had been relatively shallow heading into Monday. The Dow was down 2.3% in the three-week period that ended Friday.
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