US STOCKS-Wall St falls on concerns over German trading ban

* German market curbs spark investor unease
* Industrial shares lead drop on European exposure worry
* Housing stocks fall with mortgage applications
* Dow off 0.6 pct, S&P down 0.5 pct, Nasdaq slips 0.8 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates volume, adds comment on market breadth)

By Rodrigo Campos

NEW YORK, May 19 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) fell on Wednesday
as Germany’s unilateral action to ban specific trades on some
stocks and bonds sparked a fresh wave of uncertainty and risk
aversion among anxious investors.

Markets already fear the euro zone’s credit woes could cut
into economic growth, and Germany’s move late on Tuesday
triggered selling of industrial shares, as they have a heavy
exposure to Europe.

“It’s become increasingly clear that these are still
separate countries with their own political agendas,” said Kim
Caughey, senior equity research analyst at Fort Pitt Capital
Group in Pittsburgh.

“I think that’s what’s caused nervousness yesterday and
today.”

Germany banned investors who don’t own or haven’t borrowed
certain stocks, bonds and derivatives from selling them, in a
move that appeared to catch its partners in the European Union
off guard. [ID:nSGE64I073]

Heavy machinery maker Caterpillar Inc (CAT.N: ) slid 2.8
percent to $61.44, while shares of Boeing Co (BA.N: ) fell 2.2
percent to $66.21. The S&P industrial index (.GSPI: ) dropped
1.25 percent.

But not all the news was bad, as the broad S&P 500 bounced
off technical support, setting a floor under its recent drop.

The Dow Jones industrial average (.DJI: ) slid 66.58 points,
or 0.63 percent, to 10,444.37. The Standard & Poor’s 500 Index
(.SPX: ) fell 5.75 points, or 0.51 percent, to 1,115.05. The
Nasdaq Composite Index (.IXIC: ) lost 18.89 points, or 0.82
percent, to 2,298.37.

At the close, both the Dow and the Nasdaq had climbed back
into positive territory for the year, while the S&P 500 was
just 0.05 of a point below where it ended 2009.

S&P 500 FINDS A FLOOR

The S&P 500 briefly fell below its 200-day moving average,
a key technical long-term momentum indicator. But its rebound
off that level reinforced it as support going forward.

Declining stocks outnumbered advancing ones on the New
York Stock Exchange by a ratio of about 4 to 1, while on the
Nasdaq, about seven stocks fell for every two that rose.

“Given this is the fifth consecutive day of poor NYSE
breadth, which is an extreme reading, I expect a bounce to
take hold shortly, assuming the euro doesn’t get hit again,”
said Elliot Spar, option market strategist at Stifel
Nicolaus.

HARD KNOCKS FOR HOME BUILDERS

Housing stocks took a hit as data showed demand for loans
to buy homes sank to a 13-year low last week following the
expiration of a home buyer’s tax credit. [ID:nN19225369]

Shares of timber company Weyerhaeuser Co (WY.N: ) fell 1.2
percent to $43.90 and home builder Hovnanian Enterprises
(HOV.N: ) dropped 4.3 percent to $6.17. The PHLX housing index
(.HGX: ) fell 1.5 percent.

Stock indexes barely budged after the Federal Reserve gave
an upbeat outlook of the U.S. economy in the minutes of the
most recent meeting of its policy-setting committee.
[ID:nWEQ003931]

Data showed the U.S. Consumer Price Index fell for the
first time in a year last month and the closely watched core
inflation rate eked out its smallest annual gain since 1966,
further supporting the Fed’s vow to keep interest rates low
for some time. [ID:nN19229663]

On the upside, shares of Deere & Co (DE.N: ) rose 3 percent
to $58.87 after it reported a stronger-than-expected quarterly
profit and raised its full-year outlook. [ID:nN18173738]

About 12.27 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, well above
last year’s estimated daily average of 9.65 billion.

Stock Basics

(Reporting by Rodrigo Campos; Additional reporting by Doris
Frankel; Editing by Jan Paschal)

US STOCKS-Wall St falls on concerns over German trading ban