Eurozone woes hit US stocks

The Dow Jones Industrial Average closed down 151.44 points (1.20 percent) to 12,505.76.

The broader S&P 500 shed 24.31 points (1.81 percent) to stand at 1,319.49, while the tech-heavy Nasdaq Composite dropped 57.19 points (2.00 percent) to 2,802.62.

That followed steep falls on European markets, as political leaders and bankers in the Greek debt talks remained unable to agree on how to avert an outright default by Athens, and as worries had also spread to the heavily indebted Italy.

Friday's announcement that the US economy had produced almost no new jobs in June, and that the unemployment rate rose to 9.2 percent, continued to weigh on investor sentiment as well.

All 30 Dow blue chips were in the red, and big banks took heavy hits: Bank of America lost 3.3 percent, JPMorgan Chase fell 3.2 percent and Citigroup lost 5.3 percent.

Ford slid 4.1 percent on worries of the slow economy's impact on auto sales. "The bulk of the woes for the bulls comes amid the uncertainty regarding the US debt ceiling, exacerbated by fears of a debt crisis contagion in the eurozone with Italy taking the brunt of the blows," said analysts at Charles Schwab.

Global media baron Rupert Murdoch's News Corp lost another 7.6 percent as the scandal over the now-closed News of the World tabloid continued to snowball.

The shares were off 14.3 percent over the last five days, and Monday's fall came after there were new doubts about the company's proposed full takeover of lucrative British broadcaster BSkyB.

The European crisis sent US bond prices higher -- despite the continued debt-and-deficit talks impasse in Washington, now just three weeks before the country could be forced to into default.

The yield on the 10-ear Treasury fell to 2.92 percent from 3.02 percent late Friday, while that on the 30-year bond fell to 4.21 percent from 4.28 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011