U.S. stocks fell nearly 1 percent or more on Tuesday, with the S&P 500 falling below its 200-day moving average, as investors awaited developments in the Greece debt crisis.
The S&P 500 fell below that key level for its first time since October 20, joining the Dow Jones industrial average in negative territory for the year. The blue chip index is about 1.5 percent lower for the year and traded about 140 points lower on Tuesday after falling more than 200 points.
“Investors want to get out, not just because of Greece but because there’s a lack of bullish impetus here,” said Adam Sarhan, CEO of Sarhan Capital.
The major averages opened higher but quickly turned lower, with the Nasdaq Composite underperforming and falling more than 1 percent.
“I think right now you’re in a situation where you’re waiting for new news,” said Ben Pace, chief investment officer at HPM Partners. “You can’t ignore what’s happening to (Greece).”
Euro zone leaders held an emergency summit in Brussels to discuss Greece.
Greece will submit a new aid proposal to European creditors “maybe” on Wednesday, euro zone officials said, with Athens’ European partners convening in Brussels for emergency talks.
However, the government’s latest proposals differ only slightly from previous versions, German media reported.
“Optimism over getting a deal done faded away here because the IMF is looking at Greece exactly the same as before,” said Art Hogan, chief market strategist at Wunderlich Securities. “We’re still very much held hostage to what’s next. The market will be hard-pressed to gather any enthusiasm.”
“The good news is, as we look at the selloff thus far, it could have been a lot worse,” he said.
Stocks closed mildly lower on Monday despite the Greek’s rejection of its creditors proposals in a Sunday referendum. However, the Dow Jones industrial average closed below its 200-day moving average.
“The major indices are retesting short-term support on weakness in the energy and materials sectors,” BTIG Chief Technical Strategist Katie Stockton said in a note. “An intraday trading range has formed and it is characterized by positive divergences that bode well for a breakout in the days ahead. We would add exposure once the S&P futures clear 2082 because it would affirm the short-term oversold “buy” signal that is in place per the daily stochastics.”
In U.S. economic data, May international trade numbers showed that the U.S. trade deficit widened, fueled by a drop in exports.
Bond yields continued to fall, with the U.S. 10-year yield (US10Y) below 2.20 percent and the 2-year yield at 0.56 percent. The German 10-year bund yield was 0.64 percent.
The dollar gained nearly 1 percent, while the euro hit a low of $1.0915, its lowest since June 2.
JOLTS job openings data came in slightly higher for May than the previous month. Consumer credit figures are due at 3 p.m. The U.S. Treasury is scheduled to hold a three-year note auction later in the day.
The Federal Reserve releases its meeting minutes Wednesday afternoon.
European shares also reversed to trade trade lower, while in Asia, Japan’s blue-chip Nikkei closed 1.3 percent higher and volatility continued to mark trade in Chinese stocks.
The benchmark Shanghai Composite fell more than 1 percent amid doubts that steps taken by Beijing in the past week would shore up battered stock markets.
Oil continued to decline, with U.S. crude futures near $50 a barrel on Tuesday—off more than 3 percent.
Companies reporting earnings this session include The Container Store (TCS).
Carnival (CCL) announced Tuesday that it gained approval from the U.S. government for limited cruises to Cuba as early as next year.
The Dow Jones Industrial Average (.DJI) traded down 180 points, or 1 percent, at 17,505, with UnitedHealth (UNH) and JPMorgan Chase (JPM) the greatest decliners and Procter & Gamble (PG) leading advancers.
The S&P 500 (.SPX) traded down 20 points, or 0.97 percent, at 2,048, with materials leading eight sectors lower and utilities and consumer staples leading advancers.
The Nasdaq (.IXIC) traded down 78 points, or 1.5 percent, at 4,915.
About three stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 294 million and a composite volume of 1.3 billion.
Crude oil futures fell $1.71 to $50.82 a barrel on the New York Mercantile Exchange. Gold futures fell $20.00 to $1,153.30 an ounce in late morning trade.
Written by Evelyn Cheng of CNBC