* AIG selling Asia stake
* Eurozone private-sector data rekindles recession fear
* Dow off 0.4 pct, S&P off 0.6 pct, Nasdaq off 0.9 pct
By Rodrigo Campos
NEW YORK, March 5 U.S. stocks fell on
Monday, dragged lower by the basic materials and energy sectors
after China, the world's second-largest economy, cut its growth
target for 2012.
Data showing the U.S. services sector expanded at its
fastest pace in a year in February failed to brake the market's
decline, with indexes trading near session lows at midday.
China lowered its 2012 target to an eight-year low of 7.5
percent and made "expanding consumer demand" its top priority as
Beijing looks to shrink the economy's reliance on external
spending and foreign capital.
Materials shares, sensitive to signs of slowing in China's
commodity-hungry economy, dropped and were the biggest drag on
Wall Street. The S&P materials sector index fell 1.8
percent, while aluminum producer Alcoa Inc fell 3.4
percent to $9.89.
"With China reducing the expected growth rate, the concern
is there is the possibility of a bigger downside," said Kate
Warne, investment strategist at Edward Jones in St. Louis.
"That's why energy and commodities are leading the decline."
Warne said she was surprised there wasn't a more positive
reaction to the expansion in the U.S. services sector. The
Institute for Supply Management's February services index
climbed to its highest level in a year. She said investors were
taking profits rather than changing their optimistic view on the
The S&P 500 is up more than 8 percent so far this year,
partly on bets on a recovering U.S. economy, as well as
expectations that the euro zone's credit crisis will be
contained and China will avoid a hard landing in its current
The Dow Jones industrial average fell 55.85 points,
or 0.43 percent, to 12,921.72. The S&P 500 Index dropped
8.14 points, or 0.59 percent, to 1,361.49. The Nasdaq Composite
lost 28.11 points, or 0.94 percent, to 2,948.08.
The S&P 500 dipped below its 14-day moving average, a line
it has held for the last 50 sessions in an impressive run.
An S&P index of energy shares slipped 0.9 percent,
falling in sync with the material sector on worries about
potential slowdown in China's economy. Chevron shares
fell 0.6 percent to $109.
Further weighing on investor sentiment, Greece warned it was
ready to enforce losses on its private-sector creditors, feeding
speculation that an insufficient number of bondholders had
voluntarily taken up Athens' debt-swap offer.
The concerns pushed European equities lower after data
showing a slowdown in business activity in various euro-zone
countries, which rekindled fears the bloc was headed for
recession just as monetary policymakers were running out of new
ways to boost growth.
American International Group Inc shares rose 2.3
percent to $30.48 after the company said it is selling part of
its stake in Asian insurer AIA Group Ltd to raise
about $6 billion. AIG plans to use the money to
help it pay the U.S. government back for part of the bailout it
received after Lehman Brothers collapsed in the fall of 2008.
The Nasdaq came under pressure from iPhone and iPad maker
Apple Inc, whose shares tumbled to a session low of
$526 in late morning trading on heavy volume. At midday, Apple
had retraced some of that loss, but the stock was still down 1.5
percent at $536.99.