US stocks registered their biggest losses of the year on Tuesday amid worries about the looming Greek debt swap deal and slowing growth in the global economy.
The Dow Jones Industrial Average plunged 203.66 points (1.57 per cent) to end the day at 12,759.15. It was the blue-chip Dow's first 200-point-plus loss since November 23.
The broad-based S&P 500 shed 20.97 points (1.54 per cent) to 1,343.36.
The tech-rich Nasdaq Composite slid 40.16 points (1.36 per cent) to 2,910.32.
The three main indexes closed in the red for the third straight session after a solid start to the year.
The VIX, or so-called "fear" index, spiked higher, ending 15 per cent higher.
Stocks were under pressure from "concerns that not enough private creditors will participate in Greece's impending bond swap, putting the struggling nation once again at risk for default," said Karee Venema at Schaeffer's Investment Research.
Fresh data confirming the eurozone appears headed into recession, after shrinking by 0.3 per cent in the fourth quarter, also weighed on sentiment.
That came after China's dampened growth outlook on Monday, and as Brazil reported a mere 0.3 per cent expansion in the fourth quarter.
But Patrick O'Hare at Briefing.com said the markets were overextended and "due for a pullback".
"Declines that follow in the face of no new, adverse developments should only be seen as corrective in nature," he said.
Losses were broad-based. Intel was the only member of the Dow's 30 blue-chip stocks to finish in the green, barely, up 0.2 per cent.
Financials were hit hard. Morgan Stanley lost 5.3 per cent, Citigroup shed 4.6 per cent and Bank of America lost 3.3 per cent.
Apple, on the eve of its expected announcement of a new iPad tablet computer, slipped 0.5 per cent.
American International Group dropped 4.4 per cent after raising about $US6 billion from the sale of part of its stake in AIA to help repay a government bailout.
Bond prices climbed. The yield on the 10-year Treasury slipped to 1.94 per cent from 2.00 per cent Monday, while the 30-year yield dropped to 3.08 per cent from 3.14 per cent.
Bond prices and yields move in opposite directions.
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