Stocks tumble as Dow drops 180 points on rate hike fears

Stocks tumbled Monday with Wall Street kicking off the new week of trading following six straight weekly gains  in a negative mood as investors adjust their portfolios for a likely interest rate hike from the Federal Reserve in December after a strong reading on jobs growth in October.

The debate over whether or not the nation's central bank would pull the trigger on rate hikes this year was pretty much put to rest Friday after the government reported that the economy created 271,000 new jobs in October, well above the 185,000 economists had forecast.

The strength of the U.S. labor market, most Wall Street pros agreed, all but assures that the Janet Yellen-led Fed will use the latest window open to them and use it to hike rates.

Blockbuster jobs report raises odds of Fed rate hike in December

As a result, this week seems to mark the official start of investors big and small making adjustments to their portfolios to account for coming higher rates.

The Dow Jones industrial average fell 180 points, or 1%, to 17,730 as the blue-chip index fell back into the red for the year. The Standard & Poor's 500 index tumbled 20 points, or 1%, to 2079 as the broad-based index racked up its fourth straight day of losses. The Nasdaq composite index dropped 52 points, or 1% to 5095.

Bond yields rose again after a sharp jump on Friday as the yield on the 10-year Treasury note rose to 2.35% from 2.32% late Friday.

Market prognosticators on Wall Street are now faced with the prospect of a rising rate environment, coupled with stocks at more expensive prices following a more than 12% run-up following the market's first official 10% correction in four years this summer.

Ask Matt: Should I bail on stocks if rates rise?

If there's been one yellow flag in the current rally it is that fewer and fewer stocks are driving the major indexes higher.

Traders were also digesting a downgrade in the global economy for the remainder of 2015 and next year and weak data out of China earlier today, according to Alex Eppstein of Schaeffer's Investmet Research.

"A downwardly revised 2015 global growth forecast from the Organisation for Economic Cooperation and Development (OECD) has the Dow futures trading lower," Eppstein told clients. "The OECD warned that a slowdown in emerging markets, particularly China, is at the 'heart' of its bleaker forecast -- which, combined with downbeat data from the mainland today, has sparked some jitters ahead of the open. With anxiety still lingering over the prospect of an imminent December rate hike, it's shaping up to be a negative session for U.S. stocks."

Shares in Europe also fell. Germany's DAX index was down 1.6% and the CAC 40 in Paris was 1.5% lower. The broader Stoxx Europe 600 was down 1%.

Stocks in Asia were mixed Monday in the first day of trading following the release of the latest upbeat reading on the U.S. employment picture. Japan's Nikkei 225 soared 2%, and mainland China's Shanghai composite rose 1.6%. Hong Kong's Hang Seng index fell 0.6%.