(REUTERS) -- Wall Street fell on Tuesday on renewed concerns that Greece and private bondholders may not meet a looming deadline to complete a debt swap and as caution grew over the global economic outlook after recent weak data.

A group representing bondholders warned a default could cause more than 1 trillion euros ($1.3 trillion) of damage to the region. Creditors have until Thursday night to accept a bond swap in which they would lose almost three-quarters of the value of their bonds.

Heightening tensions over Greece come a day after China cut its growth forecast and data showed the European Union is unlikely to avoid a recession. The data was a worry for the market, which has rallied largely on hopes of a strengthening economic picture.

What is driving the market now is the outlook for economic growth elsewhere and, pretty importantly, the U.S. and China, said Jack de Gan, chief investment officer at Harbor Advisory Corp. in Portsmouth, New Hampshire.

Banks and materials shares, sensitive to flare-ups in Europe's debt crisis, fell. Bank of America Corp. lost nearly 3 percent to $7.74, while aluminum producer Alcoa Inc was off 2.7 pct to $9.60.

De Gan said the market was struggling at the top end of a S&P 500 trading range, at about 1,370. The index is up 23 percent since reaching closing lows in October. You're at the top end of the range and investors will use any excuse to lock in a profit, said de Gan.

The Dow Jones industrial average dropped 139.41 points, or 1.08 percent, to 12,823.40. The Standard & Poor's 500 Index dropped 14.33 points, or 1.05 percent, to 1,350.00. The Nasdaq Composite Index  dropped 31.38 points, or 1.06 percent, to 2,919.10.

Markets have been supported over the past few months by the concomitant strengthening in global data and easing in worries about the European crisis, Goldman Sachs said in a research note. With the data a bit muddier recently, we are happier on the sidelines for now.

Greece has no plans to extend the March 8 deadline on its bond swap offer to private creditors, Greek officials said, dismissing market rumors the date may be changed to increase participation in the offer.

European shares hit a 1-week low, with the FTSEurofirst 300 index of top European shares down 2 percent. Hong Kong shares suffered their biggest slump in nearly three months as the Hang Seng index lost 2.2 percent.

Oil dropped on concerns over global economic growth despite the continued risk to supplies due to Iran's nuclear program. Brent crude fell 1.6 percent, while U.S. crude was off nearly 2 percent.

Shares in Exxon Mobil Corp. fell 0.7 percent to $86.41. The Select Sector SPDR energy exchange-traded fund lost 1.6 percent to $73.07.

Copper fell for a third straight day, pulled lower by a stronger dollar and fears of reduced demand from China, the world's biggest consumer of the industrial metal.

Shares in miner Freeport-McMoRan Copper & Gold Inc. fell 3.6 percent to $38.97.

(Reporting by Edward Krudy; editing by Jeffrey Benkoe)