U.S. Stocks Drop on Reemerged European Debt Woes

U.S. stocks dropped in early trading on Monday as contagious fear about European debt problems once again plagued the market.

The yield on Portugal's 10-year bonds rose nearly half a percentage point to as high as 7.14 percent on Monday after the debt-burdened country was reportedly pressed by France and Germany to accept a rescue to stop the crisis from spreading.

With both Portugal and Spain scheduled to sell bonds later this week, investors' confidence will be put to the test. The biggest fear in the market right now is that Spain might be dragged in to the mire.

Meanwhile, Alcoa is going to report its fourth-quarter results after the market closes on Monday, officially kicking off a new earnings season. Investors are expecting the robust performance of U.S. companies will give the market a boost.

The Dow Jones industrial average fell 68.99 points, or 0.59 percent, to 11,605.77. The Standard & Poor's 500 index dropped 6.12 points, or 0.48 percent, to 1,265.38 and the Nasdaq was down 14.24 points, or 0.53 percent, to 2,688.93.