LOSSES were extended in heavy trading yesterday after the collapse of Greek bailout talks,with all three major US indexes falling more than one per cent for the first time since 26 May.
The Dow Jones industrial average fell 262.14 points, or 1.46 per cent, to 17,684.54, the S&P 500 lost 32.56 points, or 1.55 per cent, to 2,068.93 and the Nasdaq Composite dropped 92.61 points, or 1.82 per cent, to 4,987.90.
The Dow Jones Industrial Average turned negative for the year to date. Its last annual decline was 2008.
While the Greek economy is small and most US corporations have limited direct exposure, investors are concerned about the fallout across Europe if Greece exits the Eurozone.
Traders said US markets could fall further as investors worry that a sharp decline in the European currency caused by a deepening Greek crisis would upset US-European trade.
A snap Reuters poll of economists and traders found a median 45 per cent probability that Greece would leave the euro zone.
Adding to the uncertainty on Monday, Chinese stocks had closed sharply lower after a volatile day of trading despite surprise monetary easing by the central bank.
Concerns about Puerto Rico and its ability to pay its debts also worried investors.
Wells Fargo, down 1.9 per cent, was the biggest drag on the financial index. Goldman Sachs weighed the most on the Dow with a two per cent decline.