Stocks were battered on Monday, with benchmark indexes falling through key support levels after a disappointing factory activity report, heightening concern about the economy before Friday's monthly jobs report.
The Dow Jones Industrial Average closed down 326.05 points, or 2.08 percent, at 15,372.80.
The S&P 500 fell 40 points, or almost 2.28 percent, to 1,741.89. The Nasdaq declined 106 points, or 2.6 percent.
Stocks had wavered ahead of the report from the Institute for Supply Management (ISM) which said its index of national factory activity fell to 51.3 last month, to its lowest level since May 2013, from a recently revised 56.5 in December.
"The ISM for manufacturing was among the weaker numbers we've seen for quite some time, versus expectations. What was also concerning was among the components, the new orders number was weak," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds. Unlike other components, the one for new orders can't be explained away by the severe winter weather, he said.
"I think a report like this scares people ahead of the payroll number on Friday," Garcia-Amaya added.
"The number was much weaker than expected and the market is very sensitive at this point to thinking that the Fed has started the policy normalization process too soon," said Barry Knapp, chief market strategist at Barclays Capital.
The dollar edged lower against other global currencies and the yield on the 10-year Treasury note fell 2 basis points to 2.629 percent.
Crude futures fell 68 cents, or 0.7 percent, to $96.81 a barrel; gold futures jumped $19.30, or 1.6 percent, to $1,259.10 an ounce.
On Friday, U.S. stocks closed deep under water, with Wall Street recording its worst month in more than a year and first monthly loss since August, as investors compiled a list of worries that now include emerging markets.