NEW YORK ( TheStreet) -- China stocks were walloped overnight, with the Shanghai Composite ending 6.5% lower, marking its second-worst day of performance in 2015, taking the air out of a balloon that many felt was over-inflated, having swelled more than 50% since March. The selloff was sparked by brokers tightening margin-trading requirements for clients, causing positions to be unwound.

The U.S. dollar was giving back some of yesterday's gains, while commodities traded up on that weakness. Oil was also trading modestly higher this morning.

Meanwhile, the "Great Greek Debt Crisis" soap opera continued as Greece's optimism yesterday that a deal could be reached was quashed by officials from the European Commission, who still view the two parties as being very far away from any compromise.

The mergers rumors were running hot yesterday, with the market awaiting an Avago (AVGO) for Broadcom (BRCM) deal, which was officially announced this morning. Avago will buy chipmaker Broadcom in a cash and stock deal worth $37 billion ($17 billion of that in cash).

Notable earnings today include Tech Data (TECD), Flowers Foods (FLO), Abercrombie & Fitch (ANF), Pacific Sunwear (PSUN), Splunk (SPLK), Veeva Systems (VEEV),GameStop (GME), Trifecta Stocks holding Ulta Salon (ULTA), Infoblox (BLOX), Deckers Outdoor (DECK), Avago Technologies (AVGO) and OmniVision Technologies (OVTI).

Investors are looking forward to big domestic economic data releases today, including initial jobless claims for the week of May 23 at 8:30 a.m. ET, with consensus at 270,000; April pending home sales at 10 a.m., with consensus at 0.9%; EIA natural-gas storage change is released at 10:30 a.m.; and at 11 a.m. we'll see energy inventories from the Energy Department.

Happy trading!

  • European officials dismissed statements from Greek officials that a draft of an agreement on its bailout was being written as wishful thinking. European Commission Vice President Valdis Dombrovskis said the two sides still had some way to go before any agreement could be drawn up. "We are working very intensively to ensure a staff-level agreement," he said. "We are still not there yet." The statements contributed to lifting European stock markets on Wednesday. Meanwhile ECB governing council member Ewald Novotny played down prospects of loosening funding for Greece.
  • Japanese retail sales rebounded last month, easing pressure off the Bank of Japan. Retail sales in April rose 5% from a year earlier, trade ministry data showed on Thursday, slightly below a median market forecast for a 5.4% increase. It followed a 9.7% drop in March.
  • Deleveraging amid small and medium sized companies in the U.K. is in full swing, with seven out of 10 firms seeking to pay off their debts and not borrow more, a report showed. The SME Finance Monitor, carried out by research consultancy BDRC Continental, also found that, in the first quarter, 48% of 5,000 British small-and-medium-sized enterprises (SMEs) surveyed were now "permanent non-borrowers", having no plans to borrow money.
  • Three London-listed oil exploration companies said they discovered oil north of the Falkland Islands, which are under U.K. sovereignty but off the Argentinean coast. This could deepen an ongoing dispute with Argentina, where the islands are known as Malvinas.