* Wall Street hit by fiscal cliff concerns, shares of Apple tumble
* Spain bond sale disappoints, euro falls after hitting 7-week high
* U.S. data shows private sector hiring hit by storm
By Leah Schnurr
NEW YORK, Dec 5 (Reuters) - Wall Street stocks fell on Wednesday after Republican leaders said talks with U.S. President Barack Obama to resolve the “fiscal cliff” are deadlocked, while the euro slipped after a disappointing Spanish bond auction.
U.S. stocks had gotten off to a mixed start but selling picked up in the late morning. The Nasdaq fared worse than the other indexes, weighed by a 4 percent drop in shares of tech heavyweight Apple.
“Nothing is going on” in the talks, U.S. House Majority Leader Eric Cantor told reporters following a meeting with fellow Republicans. “We ask the president to sit down with us.”
Investors are worried that the so-called fiscal cliff of tax hikes and spending reductions that will start to go into effect at the beginning of next year could send the economy back into recession if politicians don’t come to an agreement to avoid it.
Obama stuck to his case on Tuesday for raising taxes for wealthier Americans.
The euro had surged to a seven-week high against the dollar in early trading but went into reverse, falling to $1.3064 as markets digested the disappointing Spanish bond sale.
Bond markets also reacted poorly to the auction, with Spanish 10-year yields rising to 5.42 percent after demand for the sale was below expectations.
Euro zone experts still expect Madrid to request a sovereign bailout which would pave the way for the European Central Bank to buy its debt but doubts have started to creep in again following a drop in tensions and yields in recent weeks.
“Spanish yields are trading at quite tight levels so investors may be starting to get scared about whether the current level can be sustained in the near term,” said Alessandro Giansanti, a rate strategist at ING in Amsterdam.
“This level of yields is implying that the Spanish government will ask for support in the next few months and if it doesn’t happen it’s quite likely that yields will start to move higher.”
The Dow Jones industrial average slipped 14.90 points, or 0.12 percent, to 12,936.88. The Standard & Poor’s 500 Index lost 6.88 points, or 0.49 percent, to 1,400.17. The Nasdaq Composite Index dropped 33.85 points, or 1.13 percent, to 2,962.84.
Apple was the biggest drag on the Nasdaq, tumbling about 4 percent to $551.64.
Investors were also taking in data that showed November U.S. private sector hiring was hit by the impact of superstorm Sandy, though activity in the service sector continued to expand.
The FTSEurofirst 300 index was off 0.09 percent and the MSCI index of world stocks edged down 0.03 percent.
A mixed batch of business and retail data showed euro zone shoppers cut back on spending by the biggest margin in six months in October, while purchasing manager figures pointed to another quarter of recession.
“The economic data pretty much confirmed the (euro zone) economy is still in a very weak state,” said Rabobank economist Elwin de Groot.
Wednesday’s other main economic event in Europe came in Britain, where finance minister George Osborne gave a bleak outlook, warning that growth will be weaker than expected and that he will have to break a key debt promise.
Britain’s economy was now forecast to grow by only 1.2 percent in 2013, well down from the 2 percent predicted in March.