Wall St. extends selloff on global economy worry

By Chuck Mikolajczak

NEW YORK (Reuters) – U.S. stocks fell on Tuesday in choppy trading, extending losses a day after Wall Street suffered its biggest drop since early October as data showed the pace of growth in the U.S. economy had slowed.

After unexpectedly strong third-quarter economic growth, data on Tuesday pointed to slowing growth in the fourth quarter as the pace of expansion in services moderated, while new orders for manufactured goods fell for a fourth consecutive month.

In addition to the softer data, the major headwinds for equities recently remain unresolved as crude oil prices continue to fall. An election in Greece which may trigger its exit from the euro zone is some three weeks ahead, increasing the difficulty for the European Central Bank to move towards quantitative easing as it attempts to stabilize the region’s economy.

“You can’t blame the whole thing on oil, certainly they jump on that wagon, too, when there is a negative tone and a negative sentiment,” said Ken Polcari, Director of the NYSE floor division at O’Neil Securities in New York.

“The concern going forward is going to be how the ECB is going to be able to make a decision when the Greek election is supposed to be after when the ECB is supposed to make an announcement.”

Crude oil prices continued their descent on Tuesday, with Brent <LCOc1> last down 2.8 percent at $ 51.60 a barrel and U.S. crude <CLc1> down 3.2 percent at $ 48.44.

The S&P 500 fell 1.8 percent on Monday to post its worst day in almost three months, falling below its 50-day moving average technical support level. Energy shares <.SPNY> led the decline, down 4 percent as swooning oil prices compounded global economic concerns.

The sector was down another 1 percent on Tuesday, with only 3 of its 43 components in positive territory.

The Dow Jones industrial average <.DJI> fell 62.42 points, or 0.36 percent, to 17,439.23, the S&P 500 <.SPX> lost 6.37 points, or 0.32 percent, to 2,014.21 and the Nasdaq Composite <.IXIC> dropped 28.37 points, or 0.61 percent, to 4,624.21.

AOL Inc <AOL.N> shares rose 3.4 percent to $ 46.24 the day after a report that Verizon Communications <VZ.N> approached AOL about a potential acquisition or joint venture. The Bloomberg story cited people with knowledge of the matter.

Shares of Minerva Neurosciences <NERV.O> surged 25.8 percent to $ 7.55 the day after data showed an analog of the company’s experimental compound showed improvements in treating symptoms of Parkinson’s disease in primates.

Declining issues outnumbered advancing ones on the NYSE by 1,750 to 1,207, for a 1.45-to-1 ratio; on the Nasdaq, 1,848 issues fell and 735 advanced for a 2.51-to-1 ratio favoring decliners.

The S&P 500 was posting 13 new 52-week highs and 10 new lows; the Nasdaq Composite was recording 27 new highs and 32 new lows.

(Additional reporting by Rodrigo Campos; Editing by Chizu Nomiyama, Nick Zieminski and Meredith Mazzilli)