* Worries on Iraq drive down Wall St stocks
* Biotech stocks rise despite overall downward trend
* U.S. Treasuries prices rise as stocks fall (Updates with market close, adds comments)
By Barani Krishnan
NEW YORK, June 24 (Reuters) - U.S. stocks ended lower on Tuesday as worries about Iraq drove profit-taking, after encouraging economic data earlier drove shares to another record high, while sterling tumbled on doubts whether the Bank of England would allow an interest rate hike soon.
U.S. Treasuries prices gained as investors turned away from equities. Flagging business morale in Germany pulled European stocks lower, though the dollar got a lift from the U.S. economic data.
The S&P 500 closed down more than half a percent for its sharpest loss since June 12, after setting a fourth record high in five sessions.
The stock market was boosted earlier by data showing stronger-than-expected U.S. consumer confidence and an 18.6 percent surge in sales of new homes in May.
But shares reversed course and fell more sharply toward the close on concerns about an escalation in the Iraq conflict. U.S. Secretary of State John Kerry urged leaders of Iraq’s autonomous Kurdish region to stand with Baghdad in the face of a Sunni insurgent onslaught that could destroy Iraq.
“The Iraq thing is probably getting more focus than anything else,” said Stephen Massocca, managing director at Wedbush Equity Management LLC in San Francisco. “You really had the market go up in almost a straight line since June 12, so at the top of the range here, I’m not surprised to see a little bit of a pullback.”
The Dow Jones industrial average fell 119.13 points, or 0.7 percent, to 16,818.13, the S&P 500 lost 12.63 points, or 0.64 percent, to 1,949.98, and the Nasdaq Composite dropped 18.321 points, or 0.42 percent, to 4,350.355.
Biotech shares helped buoy the Nasdaq, led by a 40.4 percent gain in Vertex Pharmaceuticals Inc to $93.53 in heavy volume.
Vertex said a combination of drugs designed to treat cystic fibrosis succeeded in improving lung function in a pair of closely watched late-stage clinical trials.
The Nasdaq Biotech index climbed 1 percent.
The price of U.S. Treasury bonds rose, pushing the 10-year benchmark yield down almost 2 basis points to 2.60 percent .
The FTSEurofirst 300 index of leading shares settled down 0.1 percent, after Germany’s Ifo index of business sentiment eased more than expected in June to its lowest level this year. The MSCI world stocks indicator was down 0.4 percent.
Sterling fell below $1.70, retreating from recent five-year peaks after Bank of England Governor Mark Carney said there was little wage or inflationary pressure in Britain.
The euro was little changed at $1.3603. The dollar index was nearly flat, too, at 80.32.
In commodities, gold hit a more than two-month high at $1,325.90 an ounce.
Brent crude settled up 34 cents at $114.46 a barrel, supported by the fighting in Iraq. U.S. crude fell 14 cents to $106.03. (Additional reporting by Jamie McGeever in London; Editing by Dan Grebler, Bernadette Baum and Leslie Adler)