U.S. stocks were hammered on Monday, with benchmark indexes falling through key support levels after a gauge of factory activity disappointed, heightening concern about the economy before Friday's monthly jobs report.

(Read more: Wall Street to eye more factory data on Tuesday)

Stocks had wavered ahead of the report that had U.S. manufacturing expanding at a substantially slower pace in January, driving overall factory activity to an eight-month low.



"A report like this scares people ahead of the payroll number on Friday," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds, who added the report's soft new orders component was of particular concern.

"We had such a strong year last year there was complacency among investors," who questioned whether they should take some profits or see if there were further reasons to invest in the U.S., with the trouble in emerging markets proving to be the initial catalyst for the steep selling in recent sessions, he added.

(See why: Bank of America pro believes the market dive is a 'high-quality' buying opportunity)

Monday's selling accelerated once stocks broke through support levels, which in the case of the S&P 500, was 1,770, wrote Bruce Bittles, chief investment strategist at RW Baird. The S&P's next support is 1,708, said Bittles, who believes the final hour of trade will be telling.

"The significance of the ISM report is not lost on the markets that are unsure how the new Fed chair will respond. Janet Yellen comes before Congress on Feb. 11," he added.