* Economic data points to slowdown in U.S. growth
* Shares of eBay slide after forecast disappoints
* UnitedHealth profit falls, shares drop
* Dow off 0.5 pct, S&P 500 off 0.7 pct, Nasdaq off 1.3 pct
By Caroline Valetkevitch
NEW YORK, April 18 U.S. stocks fell on Thursday
for the third day this week after data showed signs of slower
growth ahead for the U.S. economy, while bearish technical
signals added to doubts about the market's strength.
The S&P 500 broke below its 50-day moving average for the
first time this year, suggesting the market's recent uptrend
could be losing momentum, particularly after two days of sharp
declines this week.
The Nasdaq 100 and the Russell 2000 indexes
both have closed below their 50-day averages this week, adding
to the overall technical pressure on the market.
Technology led the day's decline, with shares of eBay
dropping 5.2 percent to $53.16, a day after issuing a
disappointing earnings forecast for the second quarter. The S&P
technology sector index shed 1.5 percent.
The CBOE Volatility Index, Wall Street's fear index,
shot up 8.2 percent to 17.87. The VIX is up more than 45 percent
for the week so far. It still remains well below its recent
highs, but the gains could signal a change in the market trend.
"Right now, it's just simply an incremental move off the
bottom, but I think the odds are pretty good, if one believes as
I do, that we're going to have a market selloff ... that the VIX
(could) get above 20 and into the 26 range, depending on how
severe that selloff is," said Bruce Zaro, chief technical
strategist at Delta Global Asset Management in Boston.
Stocks have rallied for much of the year on views that the
U.S. economy is strengthening and the Federal Reserve will keep
its economic stimulus in place.
More recent data on the economy has been less upbeat. On
Wednesday, reports showed factory activity in the Mid-Atlantic
region cooled in April and that the index of leading indicators,
a gauge of future U.S. economic activity, fell in March for the
first time in seven months.
The Dow Jones industrial average was down 77.89
points, or 0.53 percent, at 14,540.70. The Standard & Poor's 500
Index was down 10.79 points, or 0.70 percent, at
1,541.22. The Nasdaq Composite Index was down 43.08
points, or 1.34 percent, at 3,161.59.
After the close, earnings are expected from International
Business Machines, Google and Microsoft
<MSFT.O). IBM's stock fell 1.1 percent to $207.34, while
Google's shares lost 2.2 percent to $765.12. Microsoft's stock
dipped 0.2 percent to $28.76.
Apple shares continued their slide from Wednesday.
The stock tumbled 2.9 percent to $391.19.
Volume has been heavier on negative days, as many investors
have anticipated a pullback for some time after stocks' strong
run to start the year, and are quick to book profits.
The S&P 500's moving average was also the floor of the
trading range during the last month, making 1,543 a key
technical support, according to Richard Ross, global technical
strategist at Auerbach Grayson in New York.
"A close below 1,540 will generate a 'sell' signal as we
transition into this period of weak seasonality," said Ross,
noting that the S&P 500 has posted negative second quarters in
the last three years. "The 50-day is the key."
The S&P 500's healthcare sector also experienced big
declines, with UnitedHealth Group Inc down 3.4 percent
at $59.94 after the insurer lowered its 2013 revenue outlook.
S&P 500 earnings are now expected to have risen 1.9 percent
in the first quarter, up from the 1.5 percent estimate at the
start of the month, based on actual results from 82 companies
and estimates for the rest, according to Thomson Reuters data.
Of those that have reported, 72 percent have topped
analysts' expectations, but only 43.9 percent have beaten