U.S. stocks tumble on Greece fears

U.S. stocks traded sharply lower in the morning session on Monday, as the intensification of Greek debt crisis rattled market sentiment.

At midday, the Dow Jones Industrial Average decreased 204.72 points, or 1.14 percent, to 17,741.96. The S&P 500 shed 24.04 points, or 1.14 percent, to 2,077.45. The Nasdaq Composite Index dropped 66.78 points, or 1.31 percent, to 5,013.72.

Fear of an imminent default by Greece hit Greek banks, triggering bank runs at weekend and forcing Prime Minister Alexis Tsipras to announce a bank holiday on Monday and capital controls.

The European Union had given formal approval to Greece's imposition of capital controls in this troubled country on Monday, after an immediate, preliminary assessment by the European Commission, saying Greece's decision was justified.

After the collapse of five month reform-for-cash negotiations with international lenders, the Greek government called on voters to accept or reject the draft deal tabled by lenders on June 25.

The move triggered a series of reactions starting with the Eurogroup rejecting Greece's request for a loan extension to hold a referendum.

Without an agreement on June 30, Greece was unlikely to make the delayed loan installment to the International Monetary Fund, which caused Greeks to withdraw money from banks.

On the economic front, U.S. pending home sales continued to rise in May and are now at their highest level in over nine years, according to the National Association of Realtors. The Pending Home Sales Index climbed 0.9 percent to 112.6 in May from 111.6 in April.

Investors will also keep a close eye on Thursday's nonfarm payrolls report for further indications on the timing of a rate hike. Endite