Financials were clobbered amid the Greek default fears and concern a potential recession in the U.S. and global slowdown could dampen the banks’ earnings potential. Bank of America (NYSE:BAC), the largest U.S. lender, broke down below $6 per share after a report from FBR Capital Markets stating that the federal housing insurance program may be forced to deny bank claims for money lost in home loan foreclosures due to political pressures added pressure in the stock. The Charlotte, NC based bank traded as low as $5.52 per share, a level not seen since March 2009 even as Credit Suisse reiterated its outperform rating, while reducing its target price to $13.

Citigroup (NYSE:C), the third largest lender, was also under heavy pressure, logging the biggest decline in the sector. Citi tumbled 9.8% to $23.11 after logging a new low at $23.05 on weakness in the sector and on news that it was facing a probe by a Japanese regulator for various issues. Credit Suisse also cut its target price to $50 from $57.

Morgan Stanley (NYSE:MS), the operator of a global securities business, tumbled 7.7% to $12.47 after posting a new multiyear low at $12.36. Morgan has been under heavy pressure on concern over its exposure to European banks. Jim Cramer said earlier that Morgan is a great long-term buy and said that the market has overreacted to the exposure to Europe. Other analysts also said that Morgan is also a Buy as it trades at half tangible book value.

Commodities were under pressure amid Dollar strength and concerns over global growth. Crude oil fell 2% to close below $78 per barrel, which in turn added pressure to the energy sector, which was already seeing weakness as coal companies were being hit after Arch Coal (NYSE:ACI), the Missouri based coal producer, cut its guidance below consensus last Friday. The stock plunged 9.33% to $13.22 after posting a new 52-week low at $13.09.

The news also pressured Alpha Natural Resources (NYSE:ANR), the steam and metallurgical coal producer, which extended its losses from last quarter. Alpha was the weakest in the sector, tumbling 9.33% to $16.04 after posting a new yearly low at $16. The stock was the worst performer of the S&P 500 last quarter, plunging 61%.

But Marathon Petroleum (NYSE:MPC) buckled the trend in the sector and was able to add 0.33% to $27.15.

Lower prices in oil are normally a boost for airlines, however this time the space was under heavy selling pressure. AMR Corp. (NYSE:AMR), the parent of American Airlines, plunged 33.11% to $1.98 after posting a new multiyear low of $1.75. The stock tumbled the most since 2001 on bankruptcy speculation, as the airline has to deal with high jet fuel prices and higher labor costs than competitors, amid an aging fleet.

And US Airways (NYSE:LCC), the Phoenix based airline, tumbled 15.82% to $4.63 after posting a new multiyear low at $4.53. The stock traded at levels not seen since 2009 after it was downgraded to a Sell from Hold at Citigroup.

In the materials sector, gold received a lift from safe haven demand, rallying to trade above $1650 per ounce. This lifted shares of Newmont Mining (NYSE:NEM), the largest gold producer, to a gain of 0.51% to $63.27.

Freeport McMoRan (NYSE:FCX), the largest publicly traded copper producer, fell 1.9% to $29.87 on lower copper prices, which continued to be under pressure from fears of faltering demand. The Stock posted a new 52-week low at $29.85 despite Deutsche Bank upgrading it to a Buy from Hold.

In tech land, chipmakers were a big dragged to both the NASDAQ and the S&P 500. Micron Technology (NASDAQ:MU), the dynamic random access memory chips maker, plunged 14.09% to $4.33 after posting a new record low at $4.32. Micron posted the biggest decline in the S&P 500 and the NASDAQ 100. Last week the company posted an unexpected loss, missing earnings estimates as pricing pressures in DRAM memory impacted results.

NVIDIA (NASDAQ:NVDA), the world leader in visual computing technologies, tumbled 5.60% to $11.81 following weakness in the space and after Needham lowered its estimates on the space. Last quarter NVIDIA tumbled 26%.

Apple (NASDAQ:AAPL), the maker of iPads and iPhones, fell 1.76% to $374.60, outperforming the broad market index and the NASDAQ ahead of the unveiling of its new iPhone scheduled for tomorrow. Ticonderoga issued a research note in which it states that Apple stock has not performed like in past years ahead of its new iPhone launch, given the underperformance in the last 2 weeks. Several rumors circulated aabout what would be unveiled tomorrow but the most persistent one is that it will be the iPhone 5 and an iPhone 4S. The iPhone 5 will have a better camera and CDMA and GSM capability and a thinner form factor, while the 4S will be a revamped iPhone 4, tailored as a cheaper offering. Last week, Apple fell close to 6% amid concerns over the iPad production estimates, as Amazon unveiled a new tablet and JPMorgan said that its production orders for the 4th quarter had been cut 25%. Jefferies reiterated its Buy rating and $500 price target, saying that the production cuts are a result of a shift of a portion of its supply chain to Brazil and an earlier than anticipated launch of the iPad 3 for January 2012; however the stock failed to stage any meaningful reaction to the firm’s move. Apple’s price action placed the stock between its 50day moving average at the $385 area and its 200day moving average at the $353 area.

Other notable movers in the session were the automakers. Ford (NYSE:F), the Dearborn, MI based automaker, tumbled 3.1% to $9.37 and traded very close to its yearly low of $9.32. Ford posted a 9% increase in September sales over a year ago period, however concerns over s recession in the U.S. and in Europe weighed on the stock.

General Motors (NYSE:GM), the second largest automaker, also posted a sales increase for September, with sales jumping 20%. GM still fell 2.23% to $19.37. The company disappointed with sales of its electrical vehicle the Volt, with sales coming well below what the company expected for the year of the launch.

Jim Cramer, host of the Mad Money TV show, said that he would not buy automakers despite car sales tracking in the U.S. at the 12.5 million for the year, due to the heavy exposure to Europe.

And Eastman Kodak (NYSE:EK), the maker of digital cameras, film and printers, was also a notable mover, rebounding 71.7% to $1.34 after the company denied it has a bankruptcy plan. Last week, the stock lost more than half of its value following new that it had access $160 million from a credit line facility and on news that it was hiring a law firm specialized in restructuring. Read More