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US STOCKS-Wall St falls on euro-zone concerns, Dell

Source : REUTERS
Last Updated: Wed, May 23, 2012 16:50 hrs

* Euro-zone officials agree to prep for Greek exit scenario

* Dell revenue outlook weighs on sentiment

* U.S. new home sales, prices rise in April

* Facebook shares rebound despite lawsuit

* Dow off 1.4 pct, S&P off 1.4 pct, Nasdaq off 1.3 pct

By Ryan Vlastelica

NEW YORK, May 23 (Reuters) - U.S. stocks lost more than 1 percent on Wednesday, with all S&P 500 sectors trading negative as concerns mounted over Greece's future in the euro zone.

Tech shares ranked among the day's biggest decliners as a weaker-than-expected revenue forecast from Dell Inc, the third-largest computer maker, hurt investor sentiment.

Euro-zone officials have agreed that each euro-zone country must prepare an individual contingency plan in the event that Greece decides to leave the single currency bloc. The agreement was reached during a teleconference of the Eurogroup Working Group, which lasted for about an hour on Monday.

An index of European shares fell 2.2 percent to close at 971.99.

"It's very frightening to hear about this kind of talk, even if it makes sense as a contingency, because the lack of a clear path there continues to be very problematic for banks," said James Dunigan, chief investment officer of PNC Wealth Management in Philadelphia.

An S&P index of financial shares fell 1.8 percent, with Citigroup Inc down 2.6 percent at $26.21 and Capital One Financial off 2.3 percent at $49.13.

Dell Inc plunged 17.7 percent to $12.41 a day after forecasting disappointing second-quarter revenue as U.S. and European corporate tech spending weakens and consumer personal computer sales keep shrinking. Hewlett-Packard Co sank 4.6 percent to $20.78.

The Dow Jones industrial average was down 171.42 points, or 1.37 percent, at 12,331.39. The Standard & Poor's 500 Index was down 18.01 points, or 1.37 percent, at 1,298.62. The Nasdaq Composite Index was down 37.81 points, or 1.33 percent, at 2,801.27.

Falling oil prices also dragged on the energy sector, with an S&P index of energy companies' stocks down 1.9 percent. U.S. crude oil futures fell $2 and dropped below $90 a barrel for the first time since Nov. 1, as easing concerns about Iran's nuclear dispute with the West and increasing worries about global economic growth drove the price oil lower.

Stocks briefly trimmed their losses earlier in the session after data showed new U.S. single-family home sales rose more than expected in April and prices pushed higher, offering further evidence the housing market was turning the corner.

"This adds to the growing sense that housing is stabilizing, but it isn't enough to overcome the global issues driving the day," said Dunigan, who helps oversee $112 billion in assets.

Facebook Inc and banks, including Morgan Stanley , were sued by the social networking leader's shareholders, who claimed the defendants hid Facebook's weakened growth forecasts ahead of its $16 billion initial public offering. The stock was up 2.4 percent at $31.74.

In the earnings arena, shares of Toll Brothers Inc rose 0.3 percent to $27.10 after the largest U.S. luxury homebuilder reported a second-quarter profit, beating analysts' estimates, compared with a year-ago loss.




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