"They're borrowing more money, not doing anything about growth," said Zemsky. "Today we're not worried about Spain's banking system falling off a cliff, but other than that, nothing has changed."
Spain's 10-year bond yields ended the day 25 basis points higher at 6.5 percent as an early rally quickly evaporated.
Investors fear a crisis in Spain would compound the currency bloc's troubles before June 17 elections in Greece, which many think could lead to Greece's exit from the euro zone.
The worries come at a time when economies the world over are showing signs of slowing. China's inflation, industrial output and retail sales all flagged in May. It was the second straight month of sluggish growth.
U.S. companies are finding it more difficult to increase revenue now than at just about any time since the financial crisis. Firms that make up the S&P 500 are expected to boost sales by just 2.2 percent in the current quarter, according to Thomson Reuters data.
Apple Inc Chief Executive Tim Cook opened the company's annual developers conference on Monday, where he is expected to unwrap souped-up software and hardware to help it in its mobile race against Google Inc.
Goldman Sachs is close to striking a deal over the sale of its hedge fund administration business with State Street Corp, the Financial Times reported. The move would create the largest administration services provider to hedge funds worldwide.
Intellpuke: This article is a compilation of reporting by msnbc.com correspondents and various news agencies; you can read it in context here: marketday.msnbc.msn.com/_news/2012/06/11/12169498-stocks-drop-as-little-progress-seen-in-europe?lite
Reuters correspondents contributed reporting to this news article.