U.S. stock fell on Monday as new evidence surfaced that Greece would have trouble clawing its way out of a debt crisis, even as data indicated some strength in the U.S. economy.

Wall Street closed the quarter on Friday with its worst performance since 2008, sparked in part by worries over the financial crisis in Europe.

Greece's draft budget sent to parliament on Monday showed Athens would miss its deficit targets for both this year and next despite harsh new austerity measures.

The revelations brought the specter of a Greece default closer as euro zone finance ministers met to discuss the next steps toward resolving the currency area's sovereign debt crisis.

There continues to be very little clarity with respect to a solution (in Europe). More time is needed, and there's no real driving influence to put money back in the market, said Joseph Cangemi, managing director at BNY ConvergEx Group in New York.

Stocks briefly rebounded after the Institute for Supply Management's September manufacturing index topped consensus forecasts and the government said August construction spending unexpectedly rose.

The data lends credence to the idea that there is some strength in the economy, which is nice to see for a change. Let's hope this is indicative of a market that is showing improvement and will be strong for the rest of the year, said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio.

Still, European issues won't be resolved anytime soon, and headlines related to that will continue to play a part in driving the market, added Bateman, who helps oversee $14.5 billion.

The Dow Jones industrial average was down 66.67 points, or 0.61 percent, at 10,846.71. The Standard & Poor's 500 Index was down 6.25 points, or 0.55 percent, at 1,125.17. The Nasdaq Composite Index was down 13.19 points, or 0.55 percent, at 2,402.21.

The S&P 500 index lost more than 14 percent last quarter and fell more than 7 percent in September alone.

Yahoo Inc rose 4.2 percent to $13.74 after the founder and chief executive of Chinese e-commerce giant Alibaba expressed interest in buying the company and said he has talked with other potential buyers.

Eastman Kodak Co surged 93 percent to $1.50 after losing half its value on Friday. The photography company has hired a law firm specializing in bankruptcy, triggering speculation it could file. Kodak denied it has a bankruptcy plan.

U.S. stocks fell more than 2 percent on Friday as weak economic data from China sparked fears of a global economic slowdown.

(Editing by Jeffrey Benkoe)

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