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US STOCKS-Wall St falls led by energy, tech

Published 08/27/2009, 10:54 AM
Updated 08/27/2009, 10:57 AM
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* Q2 GDP shrinks 1 percent, less than expected

* Boeing shares soar after 787 schedule announcement (Updates to early morning)

By Rodrigo Campos

NEW YORK, Aug 27 (Reuters) - U.S. stocks fell on Thursday as energy shares followed slumping oil prices lower and technology issues declined, putting the brakes on an August rally that has taken stocks to 10-month highs.

The U.S. economy shrank less than expected in the second quarter and fewer workers filed new claims for unemployment benefits last week, supporting views the economy was starting to heal after a severe recession. For details see [ID:nN27303398].

Chevron Corp shares dropped 2 percent to $69.69, and the S&P energy index <.GSPE> lost 2.2 percent. Crude oil futures tumbled nearly 2 percent on concerns about swollen inventories.

The PHLX semiconductor index <.SOXX> declined 1.5 percent, with SanDisk Corp sinking 2.7 percent to $17.21.

Semiconductors are giving back recent gains and leading the technology sector lower, said Bennett Gaeger, managing director at Stifel Nicolaus in Baltimore.

He said a lack of investors typical at the end of August may be behind the pullback. "Without having everyone focused on the marketplace right now, you're going to find the path of least resistance, and at this point that is going to be on the downside," Gaeger said.

The Dow Jones industrial average <.DJI> dropped 73.16 points, or 0.77 percent, to 9,470.36. The Standard & Poor's 500 Index <.SPX> lost 10.52 points, or 1.02 percent, to 1,017.60. The Nasdaq Composite Index <.IXIC> fell 26.43 points, or 1.31 percent, to 1,998.00.

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The S&P 500 is up more than 50 percent from its March lows on expectations the economy was recovering from the deepest recession in decades.

On the upside, shares of Dow component Boeing Co jumped 7.2 percent to $51.26 after the plane maker announced a schedule for it long-delayed 787 Dreamliner. Boeing limited losses on the blue-chip Dow index. [ID:nN27309257]

Shares of bailed-out insurer American International Group Inc rose 12.3 percent to $42.27 after the new chief executive, Robert Benmosche, told Reuters on Wednesday he did not favor a fire sale of its assets. He also said in the interview that in a year people will say the company is performing well. [ID:nN26278919] [ID:nN26286770]

(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)

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