U.S. stocks skidded to a lower close Monday, as investors remained wary ahead of quarterly corporate results and another eurozone meeting.
Industrial and energy shares led the declines, with Chevron, DuPont, Caterpillar and Exxon Mobil finished the day down between 1% and 3%.
All three indexes closed lower, but bounced back from the lows of the day into the close.
The Dow Jones industrial average dropped 36 points, or 0.3%. The S&P 500 moved down 2 points, or 0.2%. The Nasdaq dropped 6 points, or 0.2%.
After 63 out of 103 companies lowered projections for earnings, investors are growing increasingly nervous about what Corporate America will say as second- quarter results kick off with aluminum producer and Dow component Alcoa after the market close.
"Investors are growing jittery before earnings seasons," said Ryan Detrick, Senior Technical Strategist at Schaeffer's Investment Research. "There's a concern that the European slowdown has made its way to the U.S."
Overall, analysts are expecting underwhelming corporate results, with earnings dropping off compared to the first quarter.
Aluminum producer Alcoa reported second-quarter results in line with analysts' expectations, and shares moved up slightly in after hours trading. Alcoa's earnings fell in the second quarter, but the company said it sees strong demand.
Results are due later in the week from search giant Google and banking leaders JPMorgan and Wells Fargo.
Meanwhile, investors have new reasons to be worried over Europe's fiscal health. Early Monday, the yield on the 10-year Spanish bond rose above 7% again -- a level that Spain's prime minister has previously called unsustainable.
Increasing pressures in Spain's bond market comes as finance ministers from eurozone countries start a two-day meeting Monday. Leaders will hammer out details about how money from the European Stability Mechanism can be used to bail out troubled banks in struggling eurozone nations.
"While we've seen some positive steps in Europe, a lot of these steps address short-term problems," said Ryan Larson, head of equity trading at U.S. RBC Global Asset Management in Chicago. "There's continued nervousness in the global marketplace because there's a sense these are short-term fixes at best."
Meanwhile, China's consumer price index rose at a modest 2.2% annual rate in June. The lower inflation rate serves as yet another signal of a global slowdown.
U.S. stocks fell Friday following a weaker-than-expected monthly jobs report. The U.S. economy added just 80,000 jobs in June, not enough to keep up with population growth.
World markets: European stocks closed down. Britain's FTSE 100 shed 0.6%, the DAX in Germany fell 0.4% and France's CAC 40 slipped 0.4%.
Asian markets reacted to the U.S. jobs report and global growth concerns, ending Monday in the red. The Shanghai Composite tumbled 2.4%, while the Hang Seng in Hong Kong dropped 1.9% and Japan's Nikkei fell 1.4%.
Economy: The Federal Reserve released May's consumer credit, which expanded more than economists predicted. Credit expanded by $17.5 billion in May compared to analysts' forecasts of $9.5 billion, after growing by a revised $9.5 billion in April.
Companies: Shares of health care provider Amerigroup soared 38% after the company announced it would be acquired by WellPoint for $4.9 billion. The deal comes less than a month after last month's U.S. Supreme Court health reform decision, which will change the landscape of the country's health care system.
Shares of Campbell Soup dropped after the company announced it would acquire organic juice maker Bolthouse Farms for $1.55 billion.
Currencies and commodities: The dollar fell against the euro, British pound and Japanese yen.
Oil for August delivery rose $1.54 to $85.99 a barrel.
Gold futures for August delivery rose $10.20 to $1,589.10 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.53% from 1.54% late Friday.