Dan Greenhaus, chief global strategist at BTIG, attributed Monday's selloff to growing frustration over the response of European policy makers to the debt crisis as they continue to remain divided over what caused the current crisis and what the appropriate responses should be.

"If you believe things are worsening globally, then the response has been quite ineffective at stemming the decline," said Greenhaus.

Adam Sarhan, chief executive of Sarhan Capital, said that not only are both the eurozone periphery nations and European banks in general suffering from a liquidity crunch, they're not really solvent by any normal measure.

"The sad reality of the situation in Europe is that no one in the world has a clear and viable solution to the European debt crisis," said Sarhan.

Earlier in Asia, the Hong Kong Hang Seng index settled down by 0.51% and the Nikkei in Japan finished lower by 0.72%.

August crude oil futures settled lower by 55 cents at $79.21 a barrel. August gold futures rose $21.50 to settle at $1,588.40 an ounce.

The benchmark 10-year Treasury was gaining 20/32, lowering the yield to 1.609%, while the dollar was rising by 0.32%, according to the dollar index.

"Expectations that further risk sharing will be agreed at this week's summit have dimmed to next to nothing," cautioned Michala Marcussen, an economist at Societe Generale. "Failure to deliver further risk sharing at the Summit will leave markets vulnerable."

In corporate news, Research In Motion ( RIMM), the BlackBerry maker, could split its business in two by separating its handset manufacturing unit from its messaging network, according to The Sunday Times, which didn't cite sources.

RIM may break off the handset division into a separate listed company or try to sell it, the British newspaper said. Amazon ( AMZN) or Facebook ( FB) were listed as potential buyers, The Sunday Times said. Shares sank about 7.5%.

Anheuser-Busch InBev ( BUD), the world's biggest brewer, is in talks to buy the 50% of Corona beer maker Grupo Modelo that it doesn't already own, Reuters reported, citing a person familiar with the matter.

The deal could be valued at more than $10 billion. Anheuser-Busch InBev shares ticked up by less than 1%.

-- Written by Andrea Tse and Shanthi Bharatwaj in New York.

>To contact the writer of this article, click here: Andrea Tse.

If you liked this article you might like

Forecast for S&P 500, Dow Industrials Remains Bullish, These Charts Show

Dow 20,000! It Should Mean Nothing to Investors, but Then Again...

Tradebird Investors Are Bullish on U.S. Stocks but Bearish on the Euro

Why Home Depot and Boeing Stock Fell Tuesday