Markets have been tanking for a week now and have several weeks of plunging deeper into negative territory to go before taking a breather, analysts say.
News that European regulators say over 15 financial institutions there may need recapitalizing, coupled with concerns that outlooks for U.S. earnings are too positive, should open the door to more selling.
"There's a lack of transparency around what's actually in banks and which ones are in a better position," Bridget Gandy, co-head of EMEA Financial Institutions, tells CNBC. "With the panic and nervousness about what's going around in the eurozone, there's a failure to distinguish among that."
In the U.S., meanwhile, economic indicators such as unemployment rates and gross domestic product growth have disappointed over the year, but corporate earnings have been strong.
That can't last forever.
"If you look at earnings expectations, they are actually quite elevated. We could be in for a surprise on the surprise," Mike Lenhoff, chief strategist at Brewin Dolphin, tells CNBC.
Concerns that Greece will default and spark a run on European banks is fueling global economic worries.
European officials have been working to shore up the Greek economy, although talk has been rising that Greece should be allowed to default in an orderly, controlled fashion.
European Central Bank governing council member Klaas Knot says default can no longer be ruled out.
"It is one of the scenarios," Dutch daily Het Financieele Dagblad quoted him as saying, Reuters reports.
"All efforts are aimed at preventing this, but I am now less certain in excluding a bankruptcy than I was a few months ago," Knot says.
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