The S&P 50 index fell to a new low for the year as U.S. stocks tumbled in late afternoon trading, following reports that the Eurozone debt crisis may get worse after the Greek government warned it would likely fail to meet deficit reduction targets.

As of 3:05 p.m. EST, the S&P 500 index is down 21.51 points, or 1,90 percent, to 1,109.78.

The ‘500’s’ closing low for the year was 1,119.46 for the year, which it reached on Aug. 8.

From its May 2011 high, the index is down about 19 percent, very close to the 20 percent decline required for a bear market.

Quincy Krosby, market strategist at Prudential Financial, told media: The [stock] market is continuing to trade based on what is happening in Europe, and that is going to overshadow everything else. The math [for Greece’s bailout] didn't add up a year ago, and the math doesn't add up today. The market knows that and is waiting for the Europeans to acknowledge it.

Traders have apparently shrugged off a better-than-expected report from the Institute of Supply Management on U.S. manufacturing in September.

Among the worst performers in the index, Alcoa (NYSE: AA) is plunging 6.7 percent; Coca-Cola (NYSE: KO) is down 3.4 percent, while Caterpillar (NYSE: CAT) has fallen 4.4 percent.

However, all of the index’s categories are in the red, with financials and energy issues leading the way down.