More Videos:

Stocks Slump as U.S. and Eurozone Uncertainties Fester


"The latest news on the fiscal cliff negotiations suggests that we have moved into the confrontation phases," said Lawson.

Investors awaited developments from the European Union finance ministers' meeting in Brussels on the topic of a single banking supervisor in the region.

There has been much friction between member states over the details of the plan, with German Finance Minister Wolfgang Schaeuble contending that it would be challenging to get the green light on such a plan from the German parliament and questioning whether it was realistic to believe that one European institution would be able to oversee thousands of banks across Europe.

"Despite the push for greater integration, it seems as though there's mixed feelings surrounding plans for a single European banking supervision, and we may see the EU persistently struggle to meet on common ground as the debt crisis continues to dampen the fundamental outlook for the region," said David Song, currency analyst at DailyFX.

Gold for February delivery dropped $25.30 to settle at $1,695.80 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts slipped 59 cents to close at $88.50 a barrel.

Most Recent Quotes

The benchmark 10-year Treasury rose 4/32 to dilute the yield to 1.613%. The dollar was off 0.29%, according to the U.S. dollar index .

In corporate news, Geron (GERN) said it would end development of GRN1005, an experimental brain cancer drug, and plans to undergo a restructuring that includes cutting its work force by 40%. It also said it plans to replace its chief financial officer. Shares declined 23%.

Cerberus Capital Management is in talks to join Virtu Financial's bid for brokerage Knight Capital Group (KCG) , The Wall Street Journal reported, citing people familiar with the discussions. Knight Capital shares closed unchanged at $3.33.

Big Lots (BIG) posted a third-quarter loss of 10 cents a share on sales of $1.13 billion. Analysts forecast a loss of 24 cents a share on revenue of $1.14 billion. The retailer raised its outlook for the year. Shares jumped 11.5%.

AutoZone (AZO) reported first-quarter earnings of $5.41 a share on revenue of $2 billion; analysts were expecting earnings of $5.39 a share on revenue of $2.02 billion. Margins improved at AutoZone during the quarter, but domestic same-store sales increased by a mere 0.2%.

AutoZone also announced that it has entered into an agreement to purchase the assets and select liabilities of AutoAnything, an online retailer of specialized automotive products. Shares slid 3%.

Pep Boys (PBY) said on Monday it swung to a third-quarter loss as revenue fell 2.4% to $509.6 million. Same-store sales decreased 2.7%. Shares slumped 10.4%.

Struggling Finnish mobile-phone maker Nokia (NOK) plans to put its head office up for sale for €170 million as it aims to reduce costs and strengthen profitability. ADRs were up 5.5% on Tuesday.