STOCKS SLAMMED, DOW FALLS 340, S&P GOES RED FOR THE YEAR: Here's what you need to know

Investors' worst fears for Greece are slowly materializing as the country implements capital controls and is set to miss a debt payment on Tuesday. US stocks had their worst single day in months, and the S&P 500 is now negative for the year. European stock markets also cratered on Monday.

First, the scoreboard:

• Dow: 17,597.82, -348.86, (-1.94%)
• S&P 500: 2,057.70, -43.79, (-2.08%)
• Nasdaq: 4,958.47, -122.04, (-2.40%)

And now, the top stories on Monday:

1. Greece will default on Tuesday. The government will miss a payment to the IMF of 30 million euros, an official told the Wall Street Journal. This was not completely unexpected, although there had been hopes that talks over the past few days could materialize into more emergency liquidity assistance from the European Central Bank. Tomorrow's miss will put Greece in arrears; although it's not technically a considered a default, it's still a skipped debt payment.
2. Greek prime minister Alexis Tsipras says Greece will not be kicked out of the euro area. According to Bloomberg, Tsipras said in an interview that the country will cope without a bailout program. He said he's done everything to reach an agreement with Greece's European creditors, who don't plan to kick the country out.
3. The Athens Stock Exchange and banks in Greece will be closed all week as part of capital controls to contain the cash shortfall. There were long queues outside ATMs as people scrambled to withdraw their savings. The government has imposed a €60 limit on all withdrawals, although this doesn't apply to visitors with foreign accounts, and pensioners may be able to get access to their money on Thursday.
4. The market turmoil began Sunday night. The euro tanked to a four-week low against the dollar, but recovered all the losses today and rebounded to as high as 1.1278. Crude oil fell more than 2% and traded lower throughout the day. West Texas Intermediate crude fell to as low as $58.05 per barrel, the weakest since June 8. All major European stock markets tumbled. The major indexes in Germany, Spain, Italy, and France fell more than 4%.
5. Several analysts say that the pain to US stocks from Greece will be minimal and temporary. "Grexit is not a thesis changer for our positive stance on US equities," wrote Fundstrat's Tom Lee in a client note on Monday. In another note today, US Trust strategists wrote, "while US Trust expects higher volatility ahead of the vote, it doesn't see signs of a broader contagion. It's likely there will be a flight to quality, especially to American stocks."
6. S&P downgraded Greece's credit rating to CCC- from CCC, just two notches from D - default. "We interpret Greece's decision to hold a referendum on official creditors' loan proposals as a further indication that the Tsipras government will prioritize domestic politics over financial and economic stability, commercial debt payments, and eurozone membership," S&P said in a statement.
7. There's a separate debt crisis in Puerto Rico, where its government has admitted that it cannot keep paying down $72 billion of public-debt obligations. Fitch downgraded Puerto Rico's rating to CC from B on Monday afternoon. The US government is not thinking about bailing out the island, the White House said. On Sunday the IMF proposed tough austerity interventions.
8. Chinese stocks slumped into a bear market. The Shanghai Composite index closed over 3% lower, and is now down 22% from its June 12 high. Over the weekend, the People's Bank of China cut interest rates and lowered reserve requirements - moves New York Stock Exchange legend Art Cashin said were made to slow a plunge in Chinese stocks.
9. In US economic data, the Dallas Fed Manufacturing index rebounded from a six-year low and read at -7 for June. Economists had estimated a reading of -16. Survey respondents noted growing wage pressures, and an easing of the impact of low oil prices on their businesses.
10. And, pending home sales rose to a nine-year high in May. Sales rose 0.9% month-over-month to 112.6 on a seasonally-adjusted basis, the highest level since April 2006, and rose 8.3% year-over-year.

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