US STOCKS-Wall St slides on European growth worry, Oracle weighs

Thu Mar 21, 2013 1:58pm EDT

* Oracle shares slide after weak results

* U.S. existing home sales rise, jobless claims up but on trend

* Dow off 0.6 pct; S&P 500 off 0.7 pct, Nasdaq off 0.9 pct

By Rodrigo Campos

NEW YORK, March 21 (Reuters) - Technology and commodity-related stocks led Wall Street down on Thursday as oil and metal prices fell on concern about euro-zone growth and after Oracle's sharp miss on quarterly results.

Worries about Cypriot finances increased after the European Union gave Cyprus until Monday to raise the billions of euros it needs to get an international bailout, or face the collapse of its financial system and likely exit from the euro bloc.

Investors fear a collapse of the banking system in Cyprus will tighten credit across Europe and become yet another hurdle in the region's bumpy road out of economic crisis.

The ultimatum to Cyprus intensified the risk level in markets and increased investors' uncertainty, according to Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.

"The uncertainty within Cyprus has investors cycling into the risk-off trade," Morganlander said.

Gold and U.S. Treasury debt prices rose and the euro dropped near its 2013 low against the U.S. dollar.

The Dow Jones industrial average fell 92.88 points or 0.64 percent, to 14,418.85. The S&P 500 lost 10.49 points or 0.67 percent, to 1,548.22. The Nasdaq Composite dropped 28.75 points or 0.88 percent, to 3,225.44.

The benchmark S&P 500 index is on track to post only its second weekly percentage drop so far this year, a testament to its impressive 2013 run.

Oracle Corp shares lost 8.9 percent to $32.60 after a number of brokerages cut their price targets on the stock following a massive miss on its third-quarter results.

Data showed the euro zone's economy contracted more than expected in March, which overshadowed a batch of reports suggesting the U.S. economic recovery was on the right track and solid first-quarter growth in China.

A downward trend in jobless claims, an increase in factory activity and a rise in sales of existing homes pointed to growing momentum in the U.S. economy during the first quarter of the year. Initial claims for U.S. unemployment benefits inched higher in the latest week, but the four-week average of new claims - a measure of labor market trends - fell to its lowest level in five years.

But the weak data from Europe drove down oil and copper prices. The S&P basic materials sector index fell 1.2 percent, making it the biggest drag on the S&P 500.

Shares of apparel retailers Guess, Tilly's and Pacific Sunwear of California slid after they forecast first-quarter results significantly below analysts' estimates.

Guess fell 5.5 percent to $25.48, Tilly's shed 8 percent to $12.66, and Pacific Sunwear lost 9.8 percent to $2.20.

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