* Microsoft falls after Goldman downgrade
* Dollar strength hurts commodity-related stocks
* Home sales, factory orders underscore weak economy
* Indexes off: Dow 1 pct, S&P 1.1 pct, Nasdaq 1.3 pct
* For up-to-the-minute market news see []
(Updates to late afternoon)
By Edward Krudy
NEW YORK, Oct 4 (Reuters) - U.S. stocks fell on Monday as
disappointing economic data, combined with worries about euro
zone debt, pushed investors away from riskier assets and
sparked profit-taking after a recent rally.
Troubling economic news from Ireland, Portugal and Greece
renewed concerns about the euro zone debts, hurting the euro
currency and sending the safe-haven U.S. dollar higher. For
details, see [].
That hit commodity prices and related stocks. The S&P
materials index <.GSPM> led the decline, falling 1.7 percent.
Mark Luschini, chief investment strategist at Janney
Montgomery Scott in Philadelphia, said that investors were
using the renewed risk aversion to take profits after
September's 9 percent run-up in the S&P 500.
"We're coming off exceptionally strong performance in the
month of September, he said. "You probably have a little bit of
an element of profit taking that was maybe accelerated by the
disappointing data points this morning."
The Dow Jones industrial average <> fell 104.63 points,
or 0.97 percent, at 10,725.05. The Standard & Poor's 500 Index
<.SPX> lost 12.04 points, or 1.05 percent, at 1,134.20. The
Nasdaq Composite Index <> declined 30.73 points, or 1.30
percent, at 2,340.02.
Pending sales of previously owned U.S. homes indicated the
housing market was stabilizing at a very low level, while new
orders received by U.S. factories fell 0.5 percent in the same
month.
Microsoft Corp <MSFT.O> was a drag on both the Dow and
Nasdaq 100, dropping 2.3 percent to $23.83 after Goldman Sachs
downgraded the software maker, citing a slow recovery in PC
sales and competition from tablet computers, which do not
include Windows software. [].
The falling U.S. dollar pressured commodity-related stocks.
Industrial materials shares fell, with U.S. Steel Corp <X.N>
off 3.9 percent to $42.92 and Alcoa <AA.N> down 3 percent to
$11.8.
The Irish central bank said on Monday Ireland's economy
will crawl to a virtual halt this year, while Greece forecast
the economy will contract 2.6 percent next year after a 4.0
percent slump in 2010. Portuguese officials urged unity on
austerity measures in the face of opposition.
The S&P 500 recently finished its best quarter in a year,
although the index has been struggling to break out of the
1,130-1,150 range.
The index fell back below the the 61.8 Fibonacci
retracement of its April to July pullback at 1,140 and moved
back towards support at 1,130, a level the index struggled
against, finally climbing above it in late September.
S&P 500 short-term technical indicators showed sell
signals. The benchmark index's 10-day momentum line fell below
zero, indicating a short-term trend reversal, while the trend
lines of the moving average convergence-divergence (MACD)
indicator crossed at oversold levels.
The third-quarter earnings season will begin unofficially
this week with Alcoa's results on Thursday. Micron Technology
Inc <MU.O>, PepsiCo Inc <PEP.N> and Monsanto Co <MON.N> are
also set to report this week.
(Reporting by Edward Krudy; Editing by Kenneth Barry)
