* Worries about global economy weigh on stocks
* Tech bellwethers fall on exposure to global economy
* Hedge fund closure fuels caution
* Dow off 0.1 pct, S&P 500 off 0.2 pct, Nasdaq off 0.1 pct
(Updates to midday, changes byline)
By Steven C. Johnson
NEW YORK, Sept 3 (Reuters) - U.S. stocks fell in skittish
trade on Wednesday as signs of increasingly sluggish growth in
the world economy left investors worried about the outlook for
consumer spending and corporate profits.
Investors sold tech bellwethers such as Intel Corp <INTC.O>
and International Business Machines Corp <IBM.N> on fears that
the sector has the most exposure to the global economy.
The 15-country euro zone reported on Wednesday its economy
shrank 10.2 percent in the second quarter.
A stronger dollar was another headwind for techs, as it
makes U.S.-manufactured products less competitive abroad.
A continued slide in oil, which dipped below $108 a barrel
<CLc1> on Wednesday, failed to spark optimism, with investors
instead calling it a symptom of slowing global demand.
U.S. crude has fallen nearly 30 percent since hitting a
record high above $147 per barrel in July.
"Global growth is still a concern. Now we are seeing
weakening growth in Europe and, to a lesser extent, Japan and
now even emerging markets," said Brian Gendreau, investment
strategist at ING Investment Management in New York. "If that's
why oil prices are down, that isn't necessarily good for
stocks."
The Dow Jones industrial average <> was down 84.10
points, or 0.73 percent, at 11,432.82. The Standard & Poor's
500 Index <.SPX> was down 10.36 points, or 0.81 percent, at
1,267.22. The Nasdaq Composite Index <> was down 23.66
points, or 1.01 percent, at 2,325.58.
The contraction in the euro zone economy in the second
quarter was the first quarter-on-quarter decline since the data
series for the euro zone started in 1995. The wider 27-country
European Union had a decline of 0.1 percent in the second
quarter, the EU statistic office reported.
A weakening global economy would compound the outlook for
corporate America since demand from abroad has served as a
lifeline for the U.S. economy as it grapples with the housing
slump.
Intel shares fell 4.3 percent to $21.60 on the Nasdaq,
making the stock a top drag on the S&P 500.
Qualcomm <QCOM.O> also weighed on Nasdaq, falling 3.0
percent to $49.61 after its chief executive told CNBC the maker
of chips for wireless technology was seeing some signs of
customers slowing their cell phones upgrades. For details, see
[]
Shares of IBM dropped 2.7 percent to $115.21. Shares of
Corning <GLW.N>, the world's largest maker of glass for liquid
crystal display televisions and computers, slid 10.5 percent to
$17.46 after the company slashed its third-quarter profit
outlook.
The closing of a hedge fund partly owned by Lehman Brothers
<LEH.N> also sparked caution.
A report in South Korea's Daily Chosun Ilbo newspaper that
top European bank HSBC Holdings <HSBA.L><0005.HK> is among
among potential buyers of Lehman, the fourth-ranked U.S.
investment bank, helped limit the stock's losses. Lehman shares
were down 1.2 percent at $15.93.
Exxon Mobil shares rose 1.1 percent to $78.17 amid short
covering after Tuesday's sharp slide.
In economic news, new orders at U.S. factories jumped more
than expected in July, helped by a rise in transportation
orders, a government report showed. []
(Additional reporting by Ellis Mnyandu; editing by Leslie
Adler)
