The decline, led once again by big drops in financial services stocks, erased year-to-date gains for the benchmark S&P 500 index.
So far this month, the S&P 500 has fallen 9.2 percent, putting Wall Street on the verge of its worst one-month slump in five years. On a points basis, the Dow is less than 200 points away from its worst monthly slide ever.
Citigroup Inc, the largest U.S. bank, slid below the $30 mark on Monday for the first time since October 2002.
The sell-off in financials overshadowed optimism early in the session fed by reports that the holiday shopping season's unofficial kick-off on Friday was stronger than many had expected. Retailers soon lost their bid as well with the S&P retailer index falling nearly 3 percent.