The Dow Jones industrial average slid 67 points to 12,705 a half-hour after the opening bell. The Dow was headed for its third straight loss.
Investors are already on edge ahead of the beginning of the earnings reporting season for U.S. companies, which begins later Monday when aluminum maker Alcoa reports its second-quarter results after the market closes. Analysts expect that corporate profits may take a hit from the latest signs of weakness in the global economy.
In Europe, investors were spooked by news that Spain's borrowing costs were rising dangerously high, just as European finance ministers gather in Brussels to finalize the details of a rescue package for the country's banks.
The interest rate on Spain's 10-year government bond rose 0.13 percent to 7 percent Monday. Greece, Ireland and Portugal all asked for help from their international lenders when their own borrowing costs rose that high.
In Greece, a new three-party coalition government won a vote of confidence in parliament early Monday, ending a period of uncertainty that led to two elections in less than two months. Greece is in its fifth year of recession and has survived for two years on international rescue loans.
Spain is in better shape financially, and can afford the high rates for a few weeks at least. However, a long-term solution is badly needed to prevent the nation, which has an unemployment rate near 25 percent, from defaulting.
In other trading, the Standard & Poor's 500 index fell six points to 1,348 and the Nasdaq fell 15 points to 2,922.
Amerigroup, which manages publicly funded health programs like Medicaid, soared $24, or 37 percent, to $88.75. The managed care provider agreed to be bought by the health insurer WellPoint for $4.5 billion in cash. Wellpoint rose $2.09, or 3.5 percent, to $62.