* AIG shares slide after posting decline in earnings
* Office Depot to close 400 U.S. stores; shares up 16 pct
* Einhorn bets Athenahealth will fall, traders sell
* Indexes down: Dow 0.8 pct; S&P 0.9 pct; Nasdaq 1.4 pct
(Updates to close)
By Rodrigo Campos
NEW YORK, May 6 U.S. stocks fell broadly on
Tuesday, closing at session lows, with AIG pulling financial
shares lower after disappointing earnings and as a slide in
Twitter took down other names in the technology and internet
Traders also kept an eye on developments in Ukraine, where
supporters of Russia and of a united Ukraine are accusing each
other of tearing the country apart. The former Soviet republic
is sliding toward war.
"The short-term issue is Ukraine. We don't know when we'll
wake up one morning and (Russian President Vladimir) Putin is
going to be in eastern Ukraine," said Jack De Gan, chief
investment officer at Harbor Advisory Corp in Portsmouth, New
Twitter shares tumbled 17.8 percent to $31.85 after
the expiration of a six-month "lock-up" period that had
restricted the sale of about 82 percent of its outstanding
The rout was in the busiest trading day for the stock so far
as more than 134 million shares changed hands, above the near
118 million shares traded on its debut. The 10-day volume
average was just under 16 million.
The S&P 500 is just 1.2 percent below its record close set a
month ago. Despite improving economic data, including a
narrowing of the trade gap reported earlier on Tuesday, the S&P
500 is facing a technical hurdle as it nears its all-time high.
"We're at resistance and we need something credible to push
us through it. The economy has to undergo a transition from a
very weak first quarter, and we're waiting for more proof on
that," said Harbor Advisory's De Gan.
The Dow Jones industrial average fell 129.53 points
or 0.78 percent, to 16,401.02, the S&P 500 lost 16.94
points or 0.9 percent, to 1,867.72 and the Nasdaq Composite
dropped 57.296 points or 1.38 percent, to 4,080.759.
AIG shares fell 4.1 percent to $50.54 a day after
posting a 27 percent drop in quarterly income.
Financials, down 1.4 percent, were the largest decliners
among the S&P 500's top ten industry sectors.
Athenahealth shares slumped 13.9 percent to
$109.21, a day after hedge fund manager David Einhorn said the
company is part of a portfolio of overvalued stocks his
Greenlight Capital was betting against.
Office Depot Inc raised its forecast for full-year
adjusted operating income and said it would close at least 400
stores in the United States over two years, sending shares up
15.8 percent to $4.83.
Adding to a string of major deals in the healthcare
industry, Bayer acquired Merck's consumer
care business for $14.2 billion. Merck shares fell 2.6 percent
About 5.9 billion shares changed hands on U.S. exchanges,
below the 6.2 billion average over the past five days, according
to data from BATS Global Markets.
Slightly more than two issues declined for every one that
advanced on the NYSE, and on Nasdaq more than 18 issues fell for
every 5 that rose.
(Reporting by Rodrigo Campos; Editing by Nick Zieminski)