Market Recap: Greece's Predictable Drag Brings Markets Down

Markets closed down today:

▼ Dow: -0.98 percent

▼ Nasdaq: -1.06 percent

▼ S&P: -1.11 percent

Precious metals:

▼ Gold: down -1.45 percent to $1,556.72 an ounce

▼ Silver: down -2.35 percent to settle at $28.13 an ounce

Commodities:

▼ Oil: -1.79 percent

Markets were down because:

A political stalemate in Greece rattled financial markets worldwide on Monday, driving U.S. stocks lower.

The euro sank to a three-month low against the dollar and borrowing costs for Spain and Italy jumped as bond traders anticipated that financial stress could spread far beyond Greece. Investors dumped risky assets and plowed into the safety of the Treasury market, pushing yields to their lowest levels this year.

The Dow Jones industrial average dropped 125.25 points to close at 12,695.35. The Dow has lost more than half of its gains for the year in the past two weeks as worries resurface about Europe and the strength of the U.S. economy.

In Athens, talks between political parties to form a government dragged into a second week. The uncertainty has raised concerns that Greece could miss a debt payment and drop the euro currency. The worry is that if Greece leaves the currency union, bond traders may demand steeper borrowing rates from other troubled countries and push them deeper into debt.

In other trading, the Standard & Poor's 500 index dropped 15.04 points to 1,338.35. The Nasdaq composite sank 31.24 points to 2,902.58.

The losses swept across the market. All 10 of the industry groups within the S&P 500 fell.

JPMorgan Chase's $2 billion trading loss continued to hang over bank stocks. JPMorgan dropped 3 percent following news that the executive overseeing its trading strategy would step down. Morgan Stanley and Citigroup, two banks with large trading operations, sank more than 4 percent.

Major markets in Europe plunged. France's CAC-40 and Germany's DAX lost 2 percent. Benchmark indexes fell nearly 3 percent in Italy and Spain.

Traders shifted money into the safest of government bonds, pushing Treasury prices up and their yields down. The yield on the 10-year note hit a low for the year, 1.77 percent.

Since hitting its high for the year on May 1, the Dow has been on a steady slide, closing lower on seven of the previous eight trading days. The Dow's 1.7 percent loss last week was its worst since Dec. 16.

The Associated Press contributed to this story.