After falling big on the Spain downgrade announcement, the market avoided an all-out rout. But it was still pretty bad, and after fighting back hard, the bulls ended up blowing it in the final moments of the day.

This is going to leave investors with a sick feeling in their stomach as they contemplate next week

As for the month, the 7.9% decline in the Dow was its worst since February 2009, according to WSJ.

But first, the scoreboard:

Dow: -122.3 (-1.2%)
S&P 500: -14 (-1.2%)
NASDAQ: -20.64 (-0.91%)

And for the top stories of the day:

• SPAIN was the biggie. Not that anyone needed a reminder that it’s in serious trouble, and certainly deserving of being the “S” in PIIGS, but Fitch’s removal of its AAA rating drove the point home. For a full guide to Spanish counterparty exposure, see here >

• Along with the problems of the Spanish government, the banking sector continues its desperate scramble to save itself, with a merger of six more banks.

• BP BP BP. Still an ongoing disaster in the Gulf, despite some signs that for now the oil leak has slowed or stop. Still no hard end in sight. BP gave up nearly all of its gains from yesterday.

• The House has passed the big carried interest tax that private equity managers are worried about it.

• China appears to be changing its stance on North Korea, a sign the dictatorial regime is increasingly isolated.

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