* Bank shares fall on concerns in European sector
* Oracle rises after Hurd hiring
* Indexes off: Dow 1 pct, S&P 1.2 pct, Nasdaq 1.1 pct
* For up-to-the-minute market news see []
(Updates to close)
By Edward Krudy
NEW YORK, Sept 7 (Reuters) - U.S. stocks fell in very light
volume on Tuesday as investors seized on renewed concerns about
European banks as a reason to sell shares after strong gains
last week.
Banks, energy companies and chipmakers were the biggest
decliners. Some analysts said the drop after Wall Street's best
week in the past two months shows the market is likely to
remain range-bound.
"It looks more like a consolidation than some type of
conviction selloff," said Maier Tarlow, a New York Stock
Exchange floor trader at Raven Securities. "We think that the
market has got a bullish trend now, and unless we see repeated
selloffs on better volume, we're going to keep that opinion."
Trading was among the lightest of the year, with 5.96
billion shares changing hands on the NYSE, Nasdaq and Amex
combined. Light volume tends to exaggerate market moves.
Worry about Europe's banks resurfaced after the Wall Street
Journal reported major lenders understated holdings in
potentially risky government debt during tests designed to
probe banks' strength.
Although investors said the report contained little new
information, it was enough to help spur profit-taking. Bank of
America Corp <BAC.N> fell 2.1 percent and JP Morgan Chase & Co
<JPM.N> lost 2.3 percent.
"There's concern about the health about the European banking
sector ... That fear kind of comes and goes," said Tom
Schrader, managing director of U.S. equity trading at Stifel
Nicolaus Capital Markets in Baltimore.
The Dow Jones industrial average <> fell 107.24 points,
or 1.03 percent, at 10,340.69. The Standard & Poor's 500 Index
<.SPX> lost 12.67 points, or 1.15 percent, at 1,091.84. The
Nasdaq Composite Index <> shed 24.86 points, or 1.11
percent, at 2,208.89.
The losses followed the long Labor Day holiday weekend when
most senior traders return to the office. Indexes had regained
ground last week after stronger-than-expected U.S. economic
data helped to quell fears of a double-dip recession.
The KBW Bank index <.BKX> lost 3.2 percent and the S&P
financial index <.GSPF> fell 2.4 percent. Bank of America fell
to $13.21 and JP Morgan Chase was down to $38.28.
Also weighing on banks, Germany's banking association said
the country's 10 biggest banks may need 105 billion euros in
new capital as regulators revamp rules designed to prevent
future crises. For details, see []
European bank shares traded on Wall Street also lost
ground. Barclays Plc <BCS.N> U.S.-traded shares dropped 5.7
percent to $19.13, while Deutsche Bank AG <DB.N> ADRs were down
3.2 percent at $62.52, and UBS AG <UBSN.VX><UBS.N> ADRs dipped
2.9 percent to $17.52.
Traders said the light volume underscored a lack of
conviction selling. Decliners outnumbered advancers by about
three to one on the New York Stock Exchange.
Bruce Zaro, chief technical strategist at Delta Global
Advisors in Boston, said he expected markets to remain volatile
and range-bound until after U.S. elections in November. Then
markets could rally sharply, he said.
"I don't think it's necessarily a reversal that has a lot
of upside from here," he said of last week's rally. Part of the
move was "a reactionary bounce to the pretty dramatic selling
we had in August," he said.
Zaro said he saw the S&P 500 hitting a ceiling at around
1,120 to 1,130, with a downside limit at around 1,000 before a
late-year rally after the elections.
Among advancers, Oracle Corp <ORCL.O> jumped 5.9 percent to
$24.26 after the world's third-largest software maker hired
Mark Hurd, the former boss at Hewlett-Packard Co <HPQ.N>, as
president.[]
U.S. Steel Corp <X.N> attracted bullish option activity on
renewed takeover speculation. Its shares rose 4.6 percent to
$48.09, with one analyst citing ArcelorMittal <ISPA.AS> as a
potential buyer. ArcelorMittal dropped 0.1 percent in New York
to $31.52.
(Reporting by Edward Krudy; Additional reporting by Doris
Frankel; Editing by Kenneth Barry)
