Stocks tumbled at Tuesday’s open on renewed concerns that Greece and private bondholders may not meet a looming deadline to complete a debt swap and as caution grew over the global economic outlook after recent weak data.
The Dow Jones industrial average was down over 120 points at the open -- its first triple-digit decline of 2012.
A group representing bondholders warned a default could cause more than 1 trillion euros ($1.3 trillion) of damage to the region. Creditors have until Thursday night to accept a bond swap in which they would lose almost three-quarters of the value of their bonds.
Heightening tensions over Greece come a day after China cut its growth forecast and data showed the European Union is unlikely to avoid a recession. The data was a worry for the market, which has rallied largely on hopes of a strengthening economy.
"What is driving the market now is the outlook for economic growth elsewhere and, pretty importantly, the U.S. and China," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
De Gan said the market was struggling at the top end of a S&P 500 trading range at about 1,370. The index is up 24 percent since reaching closing lows in October. "You're at the top end of the range and investors will use any excuse to lock in a profit," said de Gan. The S&P closed at 1,364.33 on Monday.
Banks and materials shares, sensitive to flare-ups in Europe's debt crisis, fell in early trading. Bank of America Corp lost 1.3 percent to $7.87, while aluminum producer Alcoa Inc was off 1.4 pct to $9.73.
"Markets have been supported over the past few months by the concomitant strengthening in global data and easing in worries about the European crisis," Goldman Sachs said in a research note. "With the data a bit muddier recently, we are happier on the sidelines for now."
Greece has no plans to extend the March 8 deadline on its bond swap offer to private creditors, Greek officials said, dismissing market rumors the date may be changed to increase participation in the offer.
European shares hit a 1-week low. Oil eased in volatile trading on concerns over global economic growth despite the continued risk to supplies due to Iran's nuclear program. Brent crude fell 1.4 percent to $122.14 a barrel.
Shares in Exxon Mobil Corp fell 0.8 percent to $86.30 in premarket trade. The Select Sector SPDR energy exchange-traded fund lost 0.9 percent to $73.59.
Copper fell for a third straight day, pulled lower by a stronger dollar and fears of reduced demand from China, the world's biggest consumer of the industrial metal.
Shares in Freeport-McMoRan Copper & Gold Inc fell 2 percent to $39.63 in premarket trading.
Yahoo Inc's new chief executive was preparing a significant restructuring of the Internet media company that would include thousands of layoffs, according to a technology blog. The shares fell 1 percent to $14.48 premarket.
General Motors Co will pay 320 million euros ($423 million) for a 7 percent stake in French automaker Peugeot SA as part of an alliance designed to save the companies at least $2 billion.
Reuters contributed to this report.
