U.S. STOCK MARKETS, BONDS

Nervousness about Europe's debt crisis, an economic slowdown in China and the onset of domestic earnings season pushed U.S. stocks lower for a third-straight day Monday.

The Dow Jones Industrial Average shed 36.18 points, or 0.3%, to 12736.29. The Standard & Poor's 500-stock index gave up 2.22 points, or 0.2%, to 1352.46. Materials and energy shares, seen as tied to global growth, paced declines.

The Nasdaq Composite lost 5.56 points, or 0.2%, to 2931.77. Patriot Coal Corp. (PCX) tumbled 72% after Bloomberg News reported the company had lined up financing ahead of a possible bankruptcy filing, citing unnamed people familiar with the matter.

Alpha Natural Resources Inc. (ANR) tumbled 7.5%, leading the S&P 500 lower, amid a selloff in coal shares. Talks among euro-zone finance ministers on how to bail out the Spanish banking system and create a common regulator for the region's banks failed to impress investors.

Yields on Spain's benchmark 10-year bond rose to about 7%, a level that most economists say is unsustainable. Adding to concerns, data over the weekend showed that inflation eased in China last month as demand cooled.

Alcoa Inc.'s (AA) second-quarter earnings report, released after the close, marked the unofficial kick-off of the reporting season. The blue-chip aluminum company edged up 0.4% and extended gains in after-hours trading immediately after its report as its core earnings topped analysts' estimates.

Nevertheless investors' expectations for earnings season remained muted. Dozens of companies have warned that profits would be lower than originally expected, in large part because of slowing global demand.

Consumer credit expanded in May at the fastest pace in five months, outpacing economists' expectations, a Federal Reserve report showed.

The prior month's reading was revised sharply higher. Expansion in credit could be a positive sign for the economy, showing that Americans are still seeking financing for big-ticket purchases and education loans. In other corporate news, Amerigroup Corp. (AGP) surged 38% after the health insurer said it agreed to be acquired by WellPoint Inc. (WLP) for $4.46 billion in cash.

WellPoint shares gained 3.4%, the second-biggest increase among S&P-500 components. The index's health-care sector was one of just two of its 10 groups to rise as Amerigroup rivals such as Centene Corp. (CNC) and Molina Healthcare Inc. (MOH) also advanced. In other deal news, FX Alliance Inc. (FX) leapt 40% after the electronic currency-trading platform entered into a deal to be bought by Thomson Reuters Corp. (TRI, TRI.T) for $616 million.

EUROPEAN STOCK MARKETS, BONDS

European stocks closed lower and Spanish borrowing costs jumped as investors awaited news from the latest meeting of euro-zone finance ministers.

The Stoxx Europe 600 index slipped 0.4% to 253.46. Spain's IBEX 35 index fell 0.8% to 6,688.30 but had fallen more than 6% at one point. Shares of BBVA fell 1.4%.

The country's 10-year government bond yield crept above the 7% mark--a level deemed unsustainable in the long-term--to 7.06% Germany's DAX lost 0.4% to 6387.57 and France's CAC-40 also fell 0.4% to 3156.80.

The U.K.'s FTSE 100 finished down 0.6% at 5627.33, with a fall in its heavily weighted mining stocks adding downward pressure. Investors in Europe focused on the meeting Monday of euro-zone finance ministers and a meeting Tuesday between the Economic and Financial Affairs Council. But confidence wasn't high.

Spain's fiscal fragility was exemplified by a draft document leaked before Tuesday's meeting, which suggested that Spain's 2012 budget target will be changed to 6.3% of gross domestic product.

In addition, the draft set of conclusions on the Spanish fiscal situation said that Spain "fulfills the conditions for the extension of the deadline" for returning its deficit to 3% of GDP and that it would therefore be given an extra year until 2014 to meet the 3% goal.

German Finance Minister Wolfgang Schaeuble said he was confident the eurogroup can decide on a framework for providing aid to Spain's banks but the euro zone's two bailout vehicles won't be able to provide finance directly to individual banks until a new region-wide banking supervisory agency is established.

U.K. miners fell following a sharper than expected fall in Chinese inflation data. China is one of the world's biggest consumers of iron ore, coal and other base metals.

Xstrata fell 2.2% and Anglo American dropped 2.9%. Burberry Group closed down 2.6% amid worries about China, which is a significant customer base.

Elsewhere, LVMH Moet Hennessy Louis Vuitton slipped 1.7% and Swatch Group fell 2.2%. Luxury auto maker BMW announced that it will invest an additional 250 million British pounds ($387 million) at its Mini brand's U.K. facilities by the end of 2015. BMW closed down 0.1%.

Barclays ended 0.8% lower as investors waited for the deputy governor of the Bank of England, Paul Tucker, to be questioned by a Treasury select committee over claims that Barclays was encouraged to manipulate rates.

ASIA-PACIFIC STOCK MARKETS

Asian markets fell Monday as weak U.S. employment data combined with regional economic concerns to give Chinese and Japanese stocks their worst day of trading since early June.

Investors were also looking ahead to a slew of Chinese economic data out this week, including second-quarter growth, to gauge whether China is heading towards a hard or a soft landing. A report Monday showed inflation declined to 2.2% in June, compared with a year ago.

Chinese investors reacted badly to comments made over the weekend by Premier Wen Jiabao, who said that although the Chinese economy is running at a generally stable pace, it still faces huge pressure to go downward, according to the state-run Xinhua news agency. Chinese markets experienced their biggest percentage declines since early June.

The China Shanghai Composite fell throughout the session, with loses accelerating as the day progressed, finishing 2.4% lower at 2170.81. Hong Kong's Hang Seng Index fell 1.9% to end at 19428.09, led lower by energy and minerals stocks.

China banks fell on concerns the recent rate cut will further squeeze their profit margins. China Merchants Bank fell 4.0% and Shanghai Pudong Development Bank slid 3.8%.

In Hong Kong, mainland developers succumbed to profit-taking after hawkish comments by Mr. Wen on the housing sector. China Overseas Land dropped 3.3%, while China Resources Land fell 2.8%.

Among resources stocks, PetroChina slumped 4.0% while China Coal lost 4.1% to HK$6.59. Japan started the week with its own poor economic data.

May core machinery orders, which are seen as an indicator of corporate capital investment, fell 14.8% month-on-month--much more than the expected 2.6% decline. Japan's current account surplus was also down 62.6% year-on-year.

The Nikkei fell 1.4% to 8896.88, led by financial stocks that were badly affected by the data: Mitsubishi UFJ Financial Group lost 1.8%, Sumitomo Mitsui Financial Group fell 1.4%, and Nomura Holdings was 2.4% lower. The stronger yen put Japanese exporters under pressure. Electronics company Ricoh dropped 4.4% and construction equipment manufacturer Komatsu was also 4% lower.

COMMODITIES
Base metals closed higher on the London Metal Exchange Monday, helped by some short-covering toward the session's close and a steadier euro.

At the close, LME three-month copper was up 0.4% at $7,559 a metric ton. Aluminum closed at $1,925/ton, up 1.5% on the day. U.S. oil futures jumped 1.8% Monday on the increased likelihood that a labor dispute in Norway will result in a complete shutdown of the country's production.

Striking petroleum workers are at a standoff with oil companies in Norway over the terms of their retirement package and the companies have threatened to lock out the workers and halt all production if a deal isn't reached by midnight.

Norway is the eighth-largest oil exporter in the world. Light, sweet crude for August delivery settled at $85.99 a barrel on the New York Mercantile Exchange, up $1.54. Brent crude on the ICE futures exchange was up $1.79, or 2.2%, at $99.98 a barrel.

Gold futures ended higher in quiet trading as signs of modest progress in Europe firmed investor sentiment. The most actively traded contract, for August delivery, rose $10.20, or 0.7%, to settle at $1,589.10 a troy ounce on the Comex division of the New York Mercantile Exchange. From Morrison Securities Pty. Ltd.