BLAME SPAIN: Stocks crumpled from the start of trading on news that Madrid was facing its highest borrowing costs since the launch of the euro. The Dow Jones industrial average dropped 101 to close at 12,721.

GREEK FEARS: In addition to Spain, investors are worried that Greece might get cut off from emergency loans it needs to avoid default. On Tuesday, inspectors from its international creditors arrive in the country to check on its progress in cutting its budget.

WIDESPREAD SELLING: It wasn't just U.S. stocks that suffered. European and Asian stocks were down sharply. And the euro fell to its lowest point against the dollar in two years. Commodities dropped, too.