Markets dive on economic insecurity

Stocks opened sharply lower Monday chilled by fresh fears over the global economy and trepidation over the shape of the U.S. economy.

Around noon, the Dow Jones industrial average had fallen 144 points, or 1.1 percent, to 12,513, at the start of trading. The Standard & Poor's 500 index fell 19, or 1.4 percent, to 1,324. Every industry group in the S&P 500 fell.

The Nasdaq composite fell 36, or 1.3 percent, to 2,824.

Greece is expected to receive a second financial rescue package to help the country avoid a default on its debts. But there are growing concerns that the debt crisis is spreading to larger countries like Italy and Spain. Spain is Europe's fourth largest economy. Already, bond yields for the two countries have risen sharply.

Italy's largest banks, UniCredit SpA and Intesa, fell sharply Friday, sparking fears that even aid from international lenders may not be enough to stop a broad deterioration of the European economy.

A government report Friday saying the economy created far fewer jobs than expected in June compounded fears that the U.S. economy was in even worse shape than previously thought. The unemployment rate rose to 9.2 percent.

News Corp. fell 5 percent, the most of any company in the S&P 500, as its phone hacking scandal threatened the approval of a proposed takeover of British Sky Broadcasting.

Wells Fargo fell 1.3 percent after the bank offered to settle for $125 million with pension funds that accused it of not warning investors about risky mortgage-backed securities. Semiconductor company KLA-Tencor Corp. was one of the few stocks that rose, jumping 3 percent and the most of any S&P 500 stock days after an analyst upgrade. UBS analyst Steven Chin raised the company's rating to "Buy" from "Neutral," saying its business would pick up next year.

Insurance giant AIG fell 1.5 percent after announcing it would fire one or more of the bankers it used for its recent public stock offering when it sells more stock later this year.

Aluminum maker Alcoa announces its second-quarter results after the end of trading, marking the unofficial beginning of U.S. earnings season. Aluminum is used in everything from airplanes to beer cans, so the company's results typically offer insight into the health of the broader U.S. economy.