* Facebook to buy Oculus for $2 billion; shares fall nearly
* King Digital plunges in trading debut
* U.S., EU to work together on tougher Russia sanctions
* Dow off 0.6 pct; S&P 500 off 0.7 pct; Nasdaq off 1.4 pct
(Updates with declines in S&P energy index, Newmont Mining and
Dow Chemical shares)
By Angela Moon
NEW YORK, March 26 U.S. stocks fell on
Wednesday, led by losses in the technology and materials
sectors, as geopolitical concerns rose after the United States
and the European Union agreed to work together on tougher
sanctions on Russia.
Trading remained choppy with U.S. stocks mostly positive in
the morning after U.S. economic data pointed to improving
conditions. But the major indexes reversed course in the
afternoon as technology stocks turned sharply lower.
Among technology stocks, Facebook was one of the
biggest decliners a day after the social networking company said
it would acquire two-year-old Oculus VR Inc, a maker of
virtual-reality glasses for gaming, for $2 billion. Facebook
shares ended down 6.9 percent at $60.39.
The United States and the European Union agreed to work
together to prepare possible tougher economic sanctions in
response to Russia's behavior in Ukraine. The sanctions could
possibly include the energy sector.
The S&P energy sector index slipped 0.3 percent.
U.S. President Barack Obama said after a summit with top EU
officials that Russian President Vladimir Putin had
miscalculated if he thought he could divide the West or count on
its indifference over his annexation of Crimea.
"This could be a non-event if the market wasn't at the level
that it is now. Because we are still near a record high, this
kind of geopolitical news can make investors more nervous," said
Peter Cardillo, chief market economist at Rockwell Global
Capital in New York.
A sharp drop in the stock of King Digital Entertainment Plc
, the maker of the wildly popular "Candy Crush Saga"
game, also soured investor sentiment.
King's stock fell 15.6 percent to close at $19 in its
trading debut on Wednesday after the initial public offering
valued the company at about $6 billion. King was the most
actively traded stock on the New York Stock Exchange.
The Dow Jones industrial average slipped 98.89
points, or 0.60 percent, to end at 16,268.99. The Standard &
Poor's 500 Index dropped 13.06 points, or 0.70 percent,
to finish at 1,852.56. The Nasdaq Composite Index fell
60.69 points, or 1.43 percent, to close at 4,173.58.
The CBOE Volatility Index, a widely used gauge of
investor sentiment on Wall Street, rose 6.5 percent to end at
14.93. The VIX usually moves inversely to the S&P 500.
Biotech stocks, which have sold off sharply in recent
sessions, extended their losses. The Nasdaq biotechnology index
slid 1.9 percent to end at 2,455.84.
The S&P materials sector index tumbled 1.4 percent
and ranked as the biggest decliner among 10 S&P sector indexes.
Among materials stocks, Newmont Mining Corp shares
fell 3.6 percent to end at $23.07 and ranked as the biggest
decliner in the S&P materials sector index. Dow Chemical Co
shares dropped 2.4 percent to close at $49.43.
The S&P 500's only positive sector was healthcare,
up just 0.1 percent for the day.
Going against the day's downward trend, DirectTV shares
shot up 5.7 percent to end at $77.34 and Dish Network
Corp shares jumped 6.3 percent to close at $62.09. Dish
Chief Executive Officer Charlie Ergen recently contacted DirecTV
CEO Mike White to discuss a possible tie-up, Bloomberg reported,
citing sources familiar with the matter.
After the bell, the U.S. Federal Reserve objected to plans
by Citigroup and four other banks to return capital to
shareholders, saying it had uncovered deficiencies during an
annual test of their financial robustness.
Citigroup shares fell more than 5 percent in extended-hours
trading following the news. The shares had ended the regular
session at $50.16, down 0.3 percent.
In the latest look at the U.S. economy, orders for durable
goods rose more than expected in February, ending two straight
months of declines. Another report showed private-sector
economic activity accelerated in March at a faster clip than in
February as the services sector picked up, according to
financial data firm Markit's preliminary composite Purchasing
Volume of about 7.1 billion shares traded on U.S. exchanges,
slightly above the 6.9 billion average so far this month,
according to data from BATS Global Markets.
Decliners beat advancers by a ratio of 2 to 1 on the New
York Stock Exchange, while on the Nasdaq, nearly four stocks
fell for every one that rose.
(Editing by Jan Paschal)