US STOCKS-Wall St drops on Greece woes, Treasury auction eyed

                                
   * Family Dollar beats Street, Monsanto misses
                                
 * Goldman raises KeyCorp to 'buy'
                                
 * Bernanke speech, Treasury note auction eyed
                                
 * Indexes: Dow off 0.3 pct; S&P 500 off 0.2; Nasdaq up 0.1
                                
 * For up-to-the-minute market news, click [STXNEWS/US]
  (Updates to early morning trading)
                                
 By Edward Krudy
                                
 NEW YORK, April 7 (Reuters) - The Dow industrials and S&P
500 fell on Wednesday on renewed worries over Greece's
financing woes and ahead of an auction of Treasury notes that
could further drive up yields and hurt a fragile housing
recovery.
                                
 The Treasury will sell the 10-year notes as the prospects
for a stronger economy have propelled the yield on the note, a
benchmark for mortgage rates, toward 4 percent. Investors worry
that if rates go too high, the housing revival could stall.
                                
 European stocks <.FTEU3> fell slightly as investors
questioned the credibility of Greece's aid package as the Greek
finance minister said local banks, hit by a series of credit
rating downgrades, asked for more financial support. For
details, see [ID:nLDE636138]
                                
 "One of the key dynamics is a renewal of a tired and
familiar ... (negative) story out of Greece, with the equity
market there down almost 3 percent on the day, and bond yields
really blowing out pretty dramatically," said Craig Peckham,
equity trading strategist at Jefferies & Co in New York.
                                
 The Dow Jones industrial average <.DJI> dropped 30.68
points, or 0.28 percent, to 10,939.31. The Standard & Poor's
500 Index <.SPX> fell 2.70 points, or 0.23 percent, to
1,186.74. The Nasdaq Composite Index <.IXIC> added 2.79 points,
or 0.1 percent, to 2,439.60.
                                
 U.S. equities have feasted on five weeks of gains, pushing
major indexes to highs not seen in a year and a half. The Dow
could pierce the psychologically important 11,000 level.
                                
 Shares in Family Dollar Stores Inc <FDO.N> rose 4.6 percent
to $39.52 after the discount retailer reported
higher-than-expected quarterly profit on a boost from longer
store hours and sales of private label items, and forecast
earnings above estimates. [ID:nSGE6360FT]
                                
 Monsanto Co <MON.N> rose 0.6 percent to $69.93 after the
agricultural seed company reported profit below expectations,
but analysts said they were surprised results weren't worse.
[ID:nN07103590]
                                
Helping the banking sector, Goldman Sachs raised its view on
a host of regional banks, including KeyCorp <KEY.N> which was
upgraded to "buy" from "neutral." The company's shares rose 3.7
percent to $8.78.
                                
 The Nasdaq was helped by strength in technology stocks such
as Apple Inc <AAPL.O>, up 0.5 percent to $240.86, and Cisco
Systems Inc <CSCO.O>, up 1 percent to $26.48.
                                
 Federal Reserve Chairman Ben Bernanke is due to speak on
"Economic Challenges: Past, Present and Future" at a Dallas
luncheon later Wednesday, and investors will scour his comments
for clues about the Fed's thinking on interest rates and the
economy, given recent better-than-expected economic data.
[FED/AHEAD]
  (Reporting by Edward Krudy; editing by Jeffrey Benkoe)