All 10 S&P sectors were down, but S&P financials were the hardest hit on worries about European exposure, dropping 5.4 percent.
U.S. stock markets have grown more chaotic in response to rising volatility in European debt markets, and investors have trouble keeping up with a steady stream of headlines and pricing in how the crisis might play out.
"The market has turned into a derivative of what happens in Europe now," said Craig Hodges, president of Hodges Capital Management in Dallas, Texas.
The Dow Jones industrial average was down 389.24 points, or 3.20 percent, at 11,780.94. The Standard & Poor's 500 Index was down 46.82 points, or 3.67 percent, at 1,229.10. The Nasdaq Composite Index was down 105.84 points, or 3.88 percent, at 2,621.65.