US STOCKS-Wall Street slides on weak U.S. housing data

* Indexes at seven-week closing lows

* Homebuilders fall on housing data, recover somewhat

* Indexes down: Dow 1.3 pct, S&P 1.5 pct, Nasdaq 1.7 pct

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

By Leah Schnurr

NEW YORK, Aug 24 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) fell to their
lowest level in seven weeks on Tuesday as an unexpectedly large
drop in home sales ratcheted up concerns that the economic
recovery is even weaker than had been feared.

The Dow and S&P 500 racked up their fourth day of losses in
a row after an industry group reported that sales of U.S.
existing homes in July fell to their slowest pace in 15 years.
For details, see [ID:nN24249810]

“What’s really driving us is the sense that the economic
outlook is unraveling a bit,” said Bernie McSherry, senior vice
president at Cuttone & Co in New York.

With housing a linchpin of the U.S. consumer economy, the
latest data cast doubt on the pace of recovery and adding fuel
to investors’ recent search for safety.

Prices of U.S. Treasuries soared, sending two-year yields
to another record low. On the S&P 500, defensive plays telecoms
and utilities were the only sectors to gain for the day.

Economically sensitive companies were the biggest drags on
the Dow, including plane maker Boeing (BA.N: ), which fell 3.7
percent to $60.93. Banks were also among hardest hit shares,
with the KBW Bank index (.BKX: ) down 2.2 percent.

Home building and related stocks slipped but came off their
lows after hitting technical support. The PHLX housing index
(.HGX: ) fell 1.1 percent to 89.53, clawing back from a 3 percent
drop after it encountered support near its July low, right
above 87.

The Dow Jones industrial average (.DJI: ) fell 133.96 points,
or 1.32 percent, to 10,040.45. The Standard & Poor’s 500 Index
(.SPX: ) shed 15.49 points, or 1.45 percent, to 1,051.87. The
Nasdaq Composite Index (.IXIC: ) lost 35.87 points, or 1.66
percent, to 2,123.76.

The broad Russell 2000 index (.RUT: ) was down 1.2 percent at
595.59, but held above its July intraday low of 587.67.

A report that at least seven of the 17 top Federal Reserve
officials at the U.S. central bank’s August policy meeting had
reservations about the decision to buy more Treasuries also
rattled investors. [ID:nN23224642]

Some bargain hunting helped the indexes ease off lows. The
S&P approached short-term oversold levels, dropping below 35 on
the 14-day relative strength index. A level of 30 indicates the
index could be oversold. The S&P also fell below its lower
Bollinger band at around 1,053.

Medical device maker Medtronic Inc (MDT.N: ) plunged 10.8
percent to $31.21 after it reported a decline in quarterly
sales and cut its outlook. The drop weighed on shares of rival
companies, and the health-care sector (.GSPA: ) — traditionally
a defensive group — fell 2 percent. [ID:nN24240699]

Merger and acquisitions activity continued to play a role
in the market, with news on takeover target 3PAR Inc.

Dell Inc (DELL.O: ) is preparing to sweeten its offer for
3PAR (PAR.N: ), according to a Bloomberg report. The move comes a
day after Hewlett-Packard Co (HPQ.N: ) bid $1.6 billion for the
data storage company, topping Dell’s original offer.

Shares of 3PAR gained 3.6 percent to $27.04, while Dell
fell 3 percent to $11.59. HP, a Dow component, slid 1.7 percent
to $38.39. [ID:nN24245320]

All three indexes closed at their lowest level in seven
weeks.
(Editing by Leslie Adler)

US STOCKS-Wall Street slides on weak U.S. housing data