U.S. stocks slumped Monday afternoon after a steep sell-off in China caused the Shanghai market to fall 8.5 percent, jolting markets around the world.

Monday's losses follow declines in U.S. markets last week, when the three major indexes fell between 2 and 3 percent each. Global economic growth concerns remain the focus for investors.

At the close on Wall Street, the Dow Jones industrial average was down nearly 128 points, about 0.7 percent, at 17,440.6. The Standard & Poor's 500 index lost 12 points, about 0.6 percent, to 2,067.6, and the Nasdaq composite gave up nearly 49 points, about 1 percent, to 5,039.8.

About the same time, the price of benchmark U.S. crude was down $1.09 at $47.52 a barrel in trading on the New York Mercantile Exchange. Brent crude, which is used to price international oils, was down 84 cents at $53.78 a barrel on the ICE future exchange in London.

Faced with global declines in stock prices, investors moved into traditional safe havens. The yield on the 10-year U.S. Treasury note fell to 2.22 percent from 2.26 percent on Friday. The price of gold rose 1 percent. Dividend-heavy stocks, like utilities, also gained.

"There remain very few buyers out there and there are some growing concerns that we're looking at a slowdown in global economic growth," said analyst Sean Lynch, co-head of global equity strategy with the Wells Fargo Investment Institute.

The concerns for stock investors this week started with the precipitous 8.5 percentage point fall on the Shanghai market overnight, the biggest one-day decline since February 2007. It was the latest big drop in the Chinese stock market, which has slumped since early June.

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Some analysts said Monday's dive in Shanghai was set off by brokerages restricting credit used to finance stock purchases, also known as margin trading. Chinese authorities took aggressive steps to stabilize the market after it tumbled last month, wiping away about $3.2 trillion in market value. Analysts have been skeptical that such gravity-defying efforts could be sustained.

"The continuous check on margin trading by security companies has triggered today's sell-off," said analyst Xu Xiaoyu, a market strategist at China Investment Securities. "In addition, the recent economic data shows it still takes time for the economy to recover from its sluggishness."

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