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US STOCKS-Wall St dips as housing data disappoints
July 28, 2014 / 4:55 PM / in 3 years

US STOCKS-Wall St dips as housing data disappoints

4 Min Read

* Dollar Tree offers to buy Family Dollar; deal valued at $9.2 bln

* June pending home sales unexpectedly fall

* S&P 500 about 1 percent from intraday record

* Dow off 0.2 pct; S&P 500 down 0.2 pct;, Nasdaq off 0.4 pct (Updates to midday)

By Ryan Vlastelica

NEW YORK, July 28 (Reuters) - U.S. stocks slipped on Monday as weak data on the housing market and services sector gave the latest indications that economic conditions were getting worse, taking the S&P 500 below a key support level.

While acquisition activity limited the market's decline and kept the Dow and S&P 500 near record levels, investors found few reasons to buy because the data followed some high-profile disappointments in earnings, including from Amazon.com and Caterpillar last week.

An index of pending home sales unexpectedly fell 1.1 percent in June, according to the National Association of Realtors. The report followed a drop of 8.1 percent in June new home sales, the biggest slump in almost a year. The PHLX housing sector index slid 1.8 percent. Shares of D.R. Horton Inc , the No. 1 U.S. homebuilder, tumbled 2.9 percent to $20.98.

Activity in the U.S. services sector stayed at its highest level in 4-1/2 years in July, though readings for new business and employment growth weakened, according to financial data firm Markit's preliminary data.

"This isn't the first soft data point we've gotten on housing recently, which suggests the sector is decelerating, a real discouragement," said Liam Dalton, president of Axiom Capital Management Inc in New York. "The data suggests it is time to be cautious over the idea of a robust economy."

Later this week, data on second-quarter U.S. gross domestic product and the July nonfarm payrolls report will be released.

The Dow Jones industrial average fell 28.1 points or 0.17 percent, to 16,932.47. The S&P 500 lost 4.14 points or 0.21 percent, to 1,974.20. The Nasdaq Composite dropped 16.90 points or 0.38 percent, to 4,432.66.

With the day's move, the S&P 500 fell below its 14-day moving average, a level that had served as support on Friday. The benchmark index remains less than 1 percent away from an all-time record reached last week.

In the latest deal news, Dollar Tree Inc offered to buy rival Family Dollar Stores Inc in a transaction that valued the acquired company's assets at about $9.2 billion. Zillow Inc agreed to buy Trulia Inc for $3.5 billion in stock in a deal that would combine the two most popular U.S. real estate website operators.

Family Dollar's stock jumped 23.8 percent to $75.11 and ranked as the S&P 500's biggest percentage gainer while Dollar Tree gained 3.1 percent to $55.92. Trulia added 13.4 percent to $63.88 while Zillow fell 2.1 percent to $155.56.

Cummins Inc, the U.S. maker of engines and other vehicle components, raised its full-year revenue outlook, citing improved North American demand; still, its stock dropped 3.6 percent to $144.73.

El Pollo Loco Holdings Inc, a restaurant chain that went public late last week, extended the rally from its trading debut on Friday. The stock surged 22.8 percent to $29.50. (Editing by Jan Paschal)

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