U.S. stocks opened sharply lower on Wednesday as continued concerns about Greece and the extended selloff in the Chinese market pressured investor sentiment.
The Dow Jones industrial average traded about 120 points lower after falling more than 150 points in the market open as the major averages declined.
“I think we’re just realigning the U.S. market with the declines elsewhere,” said Peter Boockvar, chief market analyst at The Lindsey Group.
In China, the Shanghai Composite closed nearly 6 percent lower and has fallen more than 30 percent from its mid-June peak amid frequent bouts of extreme volatility. Analysts say the turbulence is starting to unnerve regional investors.
“There was no real trigger until Chinese stocks became too pricey,” said Nick Raich, CEO of The Earnings Scout. “The trigger that sent all of this off has been the Greece debt crisis.”
The Greek government has until Friday morning to present detailed reform proposals to allow a bailout deal by a Sunday summit.
Greek Prime Minister Alexis Tsipras addressed the European Parliament on Wednesday, lambasting Europe’s advocacy of austerity and the efficacy of Greece’s bailout programs since 2010, but promised a detailed, “concrete” deal would be presented in the next two to three days.
“Unfortunately the U.S. will remain headline-driven until earnings season which (starts) with Alcoa tonight,” Boockvar said. “Today will clearly be bullied around by headlines out of Greece.”
The Federal Open Market Committee (FOMC) minutes will also be in focus, with traders scanning the Federal Reserve’s June meeting report for hints on interest rate rise timing.
Read More Fed minutes could be negative for market
“I think the Fed minutes are something to watch closely,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. But “usually the market doesn’t do much around the minutes until they’re released.”
Major earnings include aluminium producer Alcoa, which is expect to report after market close.
On tap this week:
Earnings: Alcoa, WD-40
1 p.m.: $21 billion 10-year note auction
2 p.m.: FOMC minutes
2 p.m.: San Francisco Fed President John Williams
Earnings: Pepsico, Walgreens Boots Alliance, PriceSmart, Cintas, Barracuda Networks
6:45 a.m.: Minneapolis Fed President Narayana Kocherlakota in Frankfurt
8:30 a.m.: Initial claims
10:15 a.m.: Fed Gov. Lael Brainard
1 p.m.: $13 billion 30-year bond auction
12:30 p.m.: Kansas City Fed President Esther George on economy and policy
10 a.m.: Wholesale trade
11:35 a.m.: Boston Fed President Eric Rosengren
12:30 p.m.: Fed Chair Janet Yellen on economy