U.S. stocks closed lower by nearly 1.5 percent or more on Wednesday as continued concerns about Greece and the extended selloff in the Chinese market weighed on investor sentiment. Stocks briefly trimmed losses as the New York Stock Exchange resumed floor trading after a near-4 hour halt. (Tweet This)
The Dow Jones industrial average and S&P 500 closed below their 200-day moving averages and are in negative territory for the year.The Nasdaq slipped 1.75 percent, while the Dow transports plunged more than 2 percent.
"I think it's just a combination of things. Greece is still a concern. China is new, and the Fed (is still out there)," said Art Hogan, chief market strategist at Wunderlich Securities. "Energy didn't get a sustained rally either and that's not helping."
The Federal Open Market Committee (FOMC) minutes from the June meeting showed policymakers were concerned about the situation in Greece and China, with most judging that rate hike conditions were not yet achieved.
"I think somewhat notable (is) more talk around Greece and China back then. It's kind of a today story," said Gregory Peters, senior portfolio manager at Prudential Fixed Income. It's "clear that they're anxious to move off the zero band, but I don't think inflation, international news or even the economy will allow them to get there."
"The market is continuing to price out rate hikes. September is priced out. December is priced out more and more so," he said, noting the latest moves in the bond market were more related to China than the United States.
Bond yields held lower, with the 10-year yield at 2.21 percent and the at 0.55 percent. The Treasury auctioned $21 billion in 10-year notes at a high yield of 2.225 percent.
The U.S. dollar fell about half a percent against major world currencies as the euro gained to above $1.10.
"What's more important (than the minutes) is Yellen has a speech scheduled for Friday," said Randy Frederick, managing director of trading and derivatives at Charles Schwab. He noted that the minutes do not reflect the drama in Greece and China of the last two weeks.
Fed Chair Janet Yellen speaks at 12:30 p.m. on Friday.
Separately, San Francisco Fed President John Williams said Wednesday in a Reuters report that the U.S. Federal Reserve will likely raise interest rates this year but should only do so when there are firmer signs that inflation is headed back up toward the central bank's 2 percent target.
Read MoreMarket 'glitches' are nothing new
Earlier, trading on the floor of the New York Stock Exchange was briefly suspended in late-morning trade on Wednesday before resuming around 3:10 p.m.
"We've had some technical malfunctions. Some may be related to connectivity with other exchanges. I believe we're going to have a temporary pause certainly in a variety of stocks perhaps floor wide," Art Cashin, director of floor operations at the NYSE, told CNBC earlier, adding that the halt will not cause a move in a particular direction.
Other exchanges, however, continued trading normally. The NYSE later said that all open orders amid the halt would be cancelled.
"What happens with these situations is often you get a sort of residual result. You're all clear or you get caught up to date and there's a little bit of a backlog that pops up somewhere, and it tends to jam things up. So I don't think any of us has quite enough information yet," Cashin added.
U.S. officials also said there were no indications of a cyberattack.
JJ Kinahan, chief strategist at TD Ameritrade, said retail investors weren't much affected by the outage.
"It's a credit to the system overall that we have an outage to a major exchange and things are able to go seamlessly," he said on CNBC.
The Dow Jones industrial average traded about 200 points lower after NYSE trading was halted as the major averages held to their earlier decline. The Nasdaq Composite off more than 1 percent as biotechs plunged more than 2 percent and Apple fell more than 1 percent. The iPhone maker was also one of the worst performing blue chips.
Phil Quartuccio, CEO of Illustro Trading, had hoped the NYSE floor would reopen by 3:00 p.m.
"I think we all walked in this morning worrying about the big Chinese dip and how it will affect us," he said. "I think the market will shake it off."
"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 despite supportive government measures. The index 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 this all off has been the Greece debt crisis."
European stocks closed higher on Wednesday amid hopes of a Greece deal. However, the indices are more than 2 percent lower for the week so far.
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."
Greek state TV said the local banks will remain closed until next Monday, Reuters reported.
The closed down 34.65 points, or 1.66 percent, at 2,046.69, with materials leading all 10 sectors lower.
The Nasdaq closed down 87.70 points, or 1.75 percent, at 4,909.76.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped 22 percent to trade near 19.6.
About five stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 434 million and a composite volume of 3.5 billion in late afternoon trade.
Floor volume on the NYSE was half the 30-day average due to the trade halt, while the consolidated volume was above the 30-day average.
Crude oil futures for August delivery settled down 68 cents, or 1.3 percent, at $51.65 a barrel on the New York Mercantile Exchange. Gold futures settled up $10.90 at $1,163.5 an ounce.
Earnings season unofficially begins with aluminium producer Alcoa reporting after the market close.
On tap this week:
Earnings: Alcoa, WD-40
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
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