Investing.com -- U.S. stocks fell to three and a half month lows erasing all of their gains for 2016, as losses mounted on Monday after S&P lowered the U.K.'s credit rating due to increased fears of an oncoming market deterioration in England in the wake of last week's historic Brexit decision.
The Dow Jones Industrial Average fell 260.51 or 1.50% to 17,140.24, dropping to its lowest level since mid-March. With the sharp declines, the Dow shaved off more than 850 points over the last two sessions, suffering its worst two-day sell-off since last August's Flash Crash. The S&P 500 Composite index, meanwhile, plunged 36.87 or 1.81% to 2,00.54, as eight of 10 sectors closed in the red. Stocks in the Basic Materials, Energy and Financials industries lagged, each falling more than 2.50%. High yield stocks in Utilities and Telecommunication led, as investors looked to capitalize on dividend plays in broad risk-off trade.
The NASDAQ Composite index, the session's underperformer, lost 113.54 or 2.41% to 4,594.44, as technology stocks continued to weigh. At session-lows, all three major fell below their 200-day moving average.
In the euro area, financial stocks tumbled more than 15%, amid concerns that major banks' earnings and net margins could take a hit if the Bank of England and European Central Bank approve further easing measures in the coming months. Goldman Sachs Group Inc (NYSE:GS), which fell 2.35 or 1.66% to 139.51, said in a note to investors on Monday that the results from last week's Brexit referendum could tip the U.K. into mild recession by early-2017. JPMorgan Chase & Co (NYSE:JPM), which warned that long-term bank profit targets could fall 13% due to Brexit concerns, lost 1.99 or 3.34% to 57.61.
Dow transports fell by nearly 3%, as airlines stocks hovered near 52-week lows. As the Pound slid to fresh 31-year lows on Monday, experts in the airline industry expressed concerns that a lower Pound sterling and euro could limit overseas corporate travel from the U.S. The downbeat travel outlook also weighed on American Express Company (NYSE:AXP), which lost 2.39 or 3.98% to 57.67, closing as the worst performer on the Dow.
The top performer was Johnson & Johnson (NYSE:JNJ), which inched up 0.92 or 0.80% to 116.55. In total, only two of 30 Dow components closed in the green.
The biggest gainer on the NASDAQ was Tesla Motors Inc (NASDAQ:TSLA), which added 5.40 or 2.80% to 198.55, bouncing from 3-month lows. Tesla shares have come under pressure from last week's potential $2.86 billion acquisition of struggling rooftop solar power systems company SCTY. Tesla CEO Elon Musk also serves the chairman of SolarCity. The worst performer was Western Digital Corporation (NASDAQ:WDC), which plummeted 5.66 or 11.83% to 42.18. Much like American Express, Western Digital shares fell amid reports that the semiconductor company will trade ex-dividend for its upcoming quarterly dividend.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,499-576 margin.