U.S. Stock Indices Post Worst Performance of Year As Global Economic Worries Sour Sentiment

U.S. stocks ended sharply lower Tuesday as concerns over a Greek debt default and China's reduced growth target crushed investors' confidence in the global economic recovery. Adding to the negative sentiment was an earlier report by the European Union's statistics office that the Euro-zone economy shrank 0.3% during Q4.

Bondholders have until late Thursday to exchange their existing Greek notes for new series of bonds and, in effect, accept a nearly 75% haircut on their original investment. Greece increasingly appears unlikely to extend the March 8 deadline for the bond swap in a bid to increase participation, with only about 20% of all bondholders so far agreeing to accept the deal, according to reports.

Stocks' descent started in early trading, as U.S. markets followed European equities lower after a report from the Institute of International Finance warned that a disorderly default by Greece could cause more than 1 trillion euros ($1.3 trillion) in damage to the euro zone. The document was cited by Reuters.

In company news, AEterna Zentaris (AEZS) is witnessing a steep correction, following yesterday's rally. Monday, shares climbed 21.1%, after an opinion piece, published on Seeking Alpha, claimed that the upcoming Phase III data for the company's cancer-fighting agent Perifosine should be positive.

Vermillion (VRML) posted an aggressive rally, almost doubling its value, after it received Category 1 CPT Code approval for its OVA1 test, designed to help differentiate benign versus malignant ovarian masses. VRML also says it received a notice of allowance from the U.S. Patent and Trademark Office for a patent for "platelet biomarkers for cancer."

Commodities took a hit in yesterday's sell-off. Gold futures declined $31.80, or 1.9%, to settle at $1,672.10 an ounce on the Comex division of the New York Mercantile Exchange, gold's lowest finish in nearly six weeks. Oil also dropped 1.9% to settle at $104.70 a barrel.

Here's where the markets stood at end-of-day, U.S.:

Dow Jones Industrial Average down 203.66 (-1.57%) to 12,769.15

S&P 50 down 20.97 (-1.54%) to 1,343.36

NASDAQ Composite Index down down 40.16 (-1.36%) to 2,910.32

GLOBAL SENTIMENT

Nikkei 225 down 0.63%

Hang Seng Index down 2.16%

China Shanghai Composite Index down 1.41%.

FTSE 100 down 1.86%.

UPSIDE MOVERS

(+) EBTX, Agreed to a $20.62 a share buyout offer from Cadence Bancorp.

(+) XOMA, Prices $39.2-million equity offering to fund clinical trials, product development.

DOWNSIDE MOVERS

(-) ONTY, Ends 2011 with $66.4 million in cash; expects to spend up to $33 million in 2012 on new drug development.

(-) NTRI, Weak 2012 forecast sparks two analyst downgrades.

(-) DATE, Reports Q4 Sales Miss