U.S. stocks dropped for a third straight session as investors continued to flee risky assets and the Standard & Poor's 500-stock index notched its worst ever three day start to September. Stocks were knocked by the spreading European debt crisis and jitters about the domestic economy. Greece's debt problems once again roiled European currency and debt markets. The big concern in Europe is that the debt crisis, which has battered smaller countries such as Greece, is spreading to some of the larger nations. The S&P 500 shed 8.73 points, or 0.74%, to 1165.24. The index is down 4.4% in the first three trading days of the month, marking the biggest percentage drop to start September in the S&P 500's history, dating back to 1957. Nine of the 10 sectors in the index finished lower Tuesday, led downward by financial and industrial stocks. The Dow Jones Industrial Average slumped 100.96 points, or 0.9%, to 11,139.30. Bank of America led the blue-chip index lower, dropping 26 cents, or 3.6%, to $6.99, while J.P. Morgan Chase fell 1.19, or 3.4%, to 33.44. The technology heavy Nasdaq Composite dropped 6.50 points, or 0.26%, to 2473.83. The losses came on top of the big slide at the end of last week after the government's disappointing monthly jobs report. The market was closed Monday for the Labor Day weekend, but markets overseas, particularly in Europe, fell sharply. The blue-chip Dow finished well off the session lows. It dropped as much as 308 points Tuesday.

European stock markets ended mostly lower Tuesday as a fresh round of sovereign debt fears roiled bank stocks, while Swiss shares soared after the country's central bank stepped in to halt the franc's gains. The Stoxx Europe 600 index dropped 0.7% to end at 221.98, as shares also fell sharply at the start of trading on Wall Street. Banks were the biggest fallers in Europe as worries over Italy's willingness to push through austerity measures and the worsening situation in Greece sapped confidence in the sector. Shares in UniCredit SpA fell 4.5% in Milan and Intesa Sanpaolo SpA dropped 3.1%, having earlier been temporarily suspended due to sharp falls. The Italian FTSE MIB index tumbled 2% to 14,049.70. The falls came amid fears about the potential dilution of austerity measures as Prime Minister Silvio Berlusconi attempted to shore up support for his budget plan. Banks were the biggest fallers across the rest of Europe, including a 6.5% drop for Societe Generale SA in Paris and a 3.4% fall for Commerzbank AG in Frankfurt. The losses for banks led a 1.1% drop for the CAC 40 index, which closed at 2,965.64, and a 1% fall for the DAX 30 index, which ended at 5,193.97. The Greek ASE Composite dropped 0.4% to 860.74. The Swiss market bucked the weaker trend, with the SMI Index soaring 4.4% to 5,367.24 after the Swiss National Bank stepped in to halt the rising franc by setting a minimum exchange rate against the euro. The central bank said it will no longer tolerate the euro trading below CHF1.20 and that it is prepared to buy foreign currency in unlimited quantities to enforce this minimum exchange rate. Almost all the top performers in Europe were Swiss, including drug maker Novartis AG up 6.8%, and fragrances and flavors group Givaudan SA, up 7.1%. Among other stocks on the move across Europe, shares of Whitbread PLC rose 7.3% in London after the hotel and restaurant operator reported a 4.8% rise in second-quarter comparable sales a solid improvement from the 1.7% growth it achieved in the first quarter. The stock led a 1.1% gain for the FTSE 100 index, which ended at 5,156.84.

Stocks ended mostly lower in Asia Tuesday, extending Monday's declines, with investors unable to shake off worries about Europe's debt woes and the health of the U.S. economy, pushing down banks and energy companies. Japan's Nikkei Stock Average ended with a 2.2% fall to 8590.57, extending Monday's 1.9% decline and marking its lowest close of the year. South Korea's Kospi fell 1.1% to 1766.71. Hong Kong's Hang Seng Index made a late recovery to end 0.5% higher at 19710.50, after trading down as much as 1.7%, while the Shanghai Composite Index fell 0.3% to 2470.52. India's Sensex rose 0.9% to 16862.81. Following Monday's sharp losses for European bank shares, Asian financial firms lost ground Tuesday, with HSBC Holdings down 1.8% in Hong Kong and Sumitomo Mitsui Financial Group down 3.4% in Tokyo. Energy companies also came under pressure in Asia, fueled in part by a drop in crude-oil futures, with JX Holdings down 2.9% in Japan. Hong Kong-listed Cnooc recovered from earlier losses to finish 0.3% higher, after plunging Monday on news a Chinese regulator had ordered a halt in production at one of its key oil fields. Other resource-sector shares also gave ground, with Aluminium Corp. of China down 3.1% in Hong Kong. Shares of Toshiba dropped 5.1% in Tokyo after The Wall Street Journal reported that it may buy another 20% of Westinghouse Electric.

Base metals closed mostly lower on the London Metal Exchange Tuesday as the worries over the euro-zone debt crisis again took center stage, driving investors out of risky assets. U.S. stocks dropped sharply, while other commodities including Nymex crude oil, precious metals, and coffee and wheat futures also moved deeper into negative territory. LME three-month copper closed the session down 0.3% at $8,933 a metric ton. Three-month lead closed 1.9% lower at $2,384/ton. U.S. oil futures ended slightly lower Tuesday as equity markets sank on deepening concerns about the European and U.S. economic outlook. Light, sweet crude for October delivery settled down 43 cents, or 0.5%, at $86.02 a barrel on the New York Mercantile Exchange. Futures fell to as low as $83.20 in intraday trading, but pared their losses as equities bounced off their session lows. Gold ended lower as the dollar, boosted by Switzerland's decision to cap the Swiss franc, weighed on prices and repelled haven demand from foreign investors. Gold for September delivery, the front-month contract, settled down $3.80, or 0.2%, at $1,869.90 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract set a record at $1,911.60 in overnight trade. The most actively traded contract, for December delivery, fell $3.60, or 0.2%, to settle at $1,873.30 a troy ounce after touching a record $1,923.70.