By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Analyst: S&P 500 could be about to start a technical correction

U.S. stocks tanked on Friday as a confluence of intensifying Greek default fears and a new stock-market regulation from China put investors on edge.

Recent gains in European equity markets and high valuations of U.S. stock indexes also made them vulnerable to a pullback, according to some analysts.

Donald Ellenberger, senior portfolio manager at Federated Investors, said concerns over Greece and its ability to pay its debt are behind the selloff in risky assets such as equities.

"Investors have piled into German bunds and credit spreads widened. But it was news from China's regulators that triggered selling, as a lot of investors were sitting on gains after a run-up in equity markets," Ellenberger said.

Early morning jitters in China also helped stoke worries.

China's securities regulator tightened rules on margin lending (http://www.marketwatch.com/story/china-regulators-to-allow-short-selling-by-fund-managers-2015-04-17)while the country's two stock exchanges said they would make it easier to bet that stocks will fall in price in an effort to temper the country's soaring stock markets.

The Dow Jones Industrial Average (DJI) shed more than 270 points, or 1.5%, to 17,832, and the S&P 500 index (SPX) lost 24 points, or 1.2%, to 2,080, while the Nasdaq Composite (RIXF) was down 75 points, or 1.5%, to 4,931.

Friday's slump followed similarly bleak action in stock-index futures before the markets officially opened.

"What we're seeing right now is a combination of panic and technical levels being wiped out and exacerbating the move lower," said Craig Erlam, senior market analyst OANDA, noting a 6%-10% correction appears to be on the cards.

Also affecting global markets was an outage of Bloomberg terminals. Traders' access to the terminals went down around the same time Asian markets closed at about 3:15 a.m. Eastern Time. The company says it is working to restore access to the Bloomberg Professional service, the company's key product. Read: Bloomberg Terminal goes down, traders get up to fun (http://www.marketwatch.com/story/bloomberg-terminal-goes-down-traders-get-up-to-fun-2015-04-17)

In economic news, consumer prices (http://www.marketwatch.com/story/consumer-prices-move-up-in-march-for-second-month-2015-04-17) rose for the second straight month in March, led by higher gasoline prices, according to data reported Friday by the Labor Department. The uptick was mostly in line with expectations.

Also read: Consumer sentiment, leading indicators improve (http://www.marketwatch.com/story/consumer-sentiment-leading-indicators-improve-2015-04-17)

Correction ahead? A technical analyst told CNBC on Friday that he expects major global benchmarks to begin correcting over the next month. "I think the correction has started on the DAX, and the S&P 500 we are probably on the top today," Yacine Kanoun, managing director at PivotHunters, a U.K.-based portfolio management company, said Friday (http://www.cnbc.com/id/102595532).

Need to Know: There is nothing quite like the smell of stock correction in the morning (http://www.marketwatch.com/story/when-sex-isnt-selling-it-might-be-time-to-get-defensive-2015-04-17)

Earnings:American Express Co.(AXP) posted a 6.5% gain in profit due to card-member spending. Shares slipped 4.8% after the payment-card company said (http://www.marketwatch.com/story/amex-profit-buoyed-by-card-member-spending-2015-04-16-16485228)its results were hurt by a stronger dollar.

Mattel Inc (http://www.marketwatch.com/story/amex-profit-buoyed-by-card-member-spending-2015-04-16-16485228).(MAT) shares rose 1.8% after the toy maker posted a narrower-than-expected loss for the first quarter.

Advanced Micro Systems Inc.(AMD) shares plunged 15% after the chip maker posted a wider-fiscal first-quarter loss and weaker revenue.

For more on today's notable movers read Movers & Shakers column (http://www.marketwatch.com/story/ge-reynolds-american-honeywell-earnings-in-focus-2015-04-17).

Other markets: In Asia, the Nikkei 225 posted a 1.2% drop, while the Shanghai Composite Index surged 2.2%. European stocks also slumped on the back of the news from China, with the Stoxx Europe 600 index off 1.7%.

Oil futures (CLK5) were under pressure, while gold prices (CLK5) pushed higher.

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