January 29, 2010 / 9:31 PM / in 8 years

US STOCKS-Wall St falls on euro-zone worry, tech slide

* Euro-zone fiscal problems spur some risk aversion

* Apple and Microsoft lead tech sector’s decline

* Dow off 0.5 pct, S&P off 1 pct; Nasdaq off 1.5 pct

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to close)

By Chuck Mikolajczak

NEW YORK, Jan 29 (Reuters) - U.S. stocks dropped on Friday, as worries about fiscal turmoil in Europe and a drop in technology stocks pushed the S&P 500 to its worst monthly decline since February 2009.

Uncertainty about the fiscal stability of Greece, Portugal and Spain caused U.S. investors to pull back from early gains, even as Greek and European Union officials said there was no chance of a Greek default or EU bailout. For details, see [ID:nLDE60S0XN]

“Sovereign debt issues continue to weigh on the market,” said Robert Francello, head of equity trading for Apex Capital in San Francisco.

“The pattern has been to sell into the weekend, wait for sovereign risk and sovereign default news in Europe, and if it doesn’t happen, the relief rally begins.”

Major indexes initially rose more than 1 percent after a host of reports showed the U.S. economy grew at a much stronger-than-expected pace during the fourth quarter and pointed to continued improvement in the first quarter. [ID:nN28246399]

But the broader market lost ground by midday as investors sold off shares of such technology bellwethers as Apple Inc AAPL.O, Microsoft Corp MSFT.O and International Business Machines Corp IBM.N.

The PHLX Semiconductor index .SOXX dropped 3.4 percent, weighed down by a soft profit forecast from flash memory maker SanDisk Corp SNDK.O, which tumbled 11.7 percent to $25.42. [ID:nN28107322]

The Dow Jones industrial average .DJI dropped 53.13 points, or 0.52 percent, to 10,067.33. The Standard & Poor’s 500 Index .SPX lost 10.66 points, or 0.98 percent, to 1,073.87. The Nasdaq Composite Index .IXIC fell 31.65 points, or 1.45 percent, to 2,147.35.

The recent sell-off has seen the S&P 500 tumble 6.7 percent in the last eight trading sessions.

For the week, the Dow lost 1.1 percent, the S&P 500 fell 1.7 percent and the Nasdaq lost 2.6 percent.

For January, the Dow slid 3.5 percent, the S&P 500 shed 3.7 percent and the Nasdaq tumbled 5.4 percent.

Shares of Apple lost 3.6 percent to $192.12 and ranked as the heaviest weight on the Nasdaq, while Microsoft’s stock fell 3.4 percent to $28.18. IBM slipped 1.1 percent to $122.39.

Big manufacturers, including Boeing Co BA.N, as well as the energy and materials sectors fell, weighing on both the Dow and the S&P 500 after Honeywell HON.N set a first-quarter profit target that fell short of analysts’ expectations. [ID:nN29134579]

Boeing shed 3.1 percent to $60.60 while Honeywell lost 3 percent to $38.64.

Volume was light on the New York Stock Exchange, with about 1.58 billion shares changing hands, below last year’s estimated daily average of 2.18 billion. On the Nasdaq, about 3.1 billion shares traded, well above last year’s daily average of 1.63 billion.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of more than 2 to 1, while on the Nasdaq, about two stocks fell for every one that rose. (Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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