* Soft demand at Italy debt auction sparks concern
* S&P now 10 points away from record closing high
* U.S. Feb pending home sales fell 0.4 pct
* Indexes off: Dow 0.5 pct; S&P 0.5 pct; Nasdaq 0.6 pct
By Angela Moon
NEW YORK, March 27 U.S. stocks fell on
Wednesday, after a robust rally a day earlier, as limp demand at
an Italian debt auction sparked concerns over the financial
health of the euro zone.
The S&P 500 index, which rose to within striking distance of
its record closing high on Tuesday, was now more than 10 points
away from that peak.
Stoking concerns about the euro zone, Italy paid more to
borrow over five years than it has since October at an auction
Wednesday, as lack of progress in forming a new government and
worries about Cyprus's bailout hurt demand.
"The overhang of the Cypriot bailout, and especially its
implications for euro zone-wide banking depositors, along with a
dip in confidence and lackluster Italian debt auctions have
upset the apple cart for U.S. investors determined to assault
record stock market highs," said Andrew Wilkinson, chief
economic strategist at Miller Tabak & Co in New York.
Cyprus is finalizing capital control measures to prevent a
run on its banks by depositors anxious about their savings,
after wealthy depositors were penalized under a rescue package
agreed with international lenders. Cypriot banks are due to
reopen on Thursday.
The Dow Jones industrial average was down 64.90
points, or 0.45 percent, at 14,494.75. The Standard & Poor's 500
Index was down 7.39 points, or 0.47 percent, at
1,556.38. The Nasdaq Composite Index was down 18.37
points, or 0.56 percent, at 3,234.15.
As Boeing works to regain permission for its 787
Dreamliner to resume flights, it faces what could be a costly
new challenge - a temporary ban on some long-distance,
trans-ocean journeys the jet was intended to fly.
Boeing was the biggest decliner on the Dow index, shedding
1.6 percent to $85.24.
JPMorgan Chase & Co also weighed heavily on the Dow,
falling 1.5 percent to $47.93 following a report that U.S.
prosecutors are examining whether JPMorgan fully alerted
authorities to suspicions about fraudster Bernard Madoff.
Short interest in BlackBerry was at record
levels and has more than doubled over the course of the last
year, according to industry data released on Tuesday.
But shares were up 0.3 percent at $14.51 in
Data showed contracts to buy previously owned U.S. homes
fell in February, held back by a shortage of properties, but
there was little to suggest that the housing market recovery was
stalling. The market's reaction was muted.
Investors will be hearing remarks from several U.S. Federal
Reserve officials throughout the day, including Chicago Fed
President Charles Evans and Boston Federal Reserve Bank
President Eric Rosengren.