Russia sanctions worry hits Wall Street; tech stocks weigh

Facebook shares slip 6.9% after it announced acquisition of virtual-reality goggles maker

US stocks fell on Wednesday, led by losses in the technology and materials sectors, as geopolitical concerns rose after the United States and the European Union agreed to work together on tougher sanctions on Russia.

Trading remained choppy with US stocks mostly positive in the morning after US economic data pointed to improving conditions. But the major indexes reversed course in the afternoon as technology stocks turned sharply lower.

Among technology stocks, Facebook was one of the biggest decliners a day after the social networking company said it will acquire two-year-old Oculus VR Inc, a maker of virtual-reality glasses for gaming, for $2 billion. Facebook shares ended down 6.9% at $60.39.

The United States and the European Union agreed to work together to prepare possible tougher economic sanctions in response to Russia's behavior in Ukraine. The sanctions could possibly include the energy sector.

US President Barack Obama said after a summit with top EU officials that Russian President Vladimir Putin had miscalculated if he thought he could divide the West or count on its indifference over his annexation of Crimea.

"This could be a non-event if the market wasn't at the level that it is now. Because we are still near a record high, this kind of geopolitical news can make investors more nervous," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

A sharp drop in the stock of King Digital Entertainment Plc , the maker of the wildly popular "Candy Crush Saga" game, also soured investor sentiment.

King's stock fell 15.6% to close at $19 in its trading debut on Wednesday after the initial public offering valued the company at about $6 billion. King was the most actively traded stock on the New York Stock Exchange.

The Dow Jones industrial average slipped 98.89 points, or 0.60%, to end at 16,268.99. The Standard & Poor's 500 Index dropped 13.06 points, or 0.70%, to finish at 1,852.56. The Nasdaq Composite Index fell 60.69 points, or 1.43%, to close at 4,173.58.

The CBOE Volatility Index, a widely used gauge of investor sentiment on Wall Street, rose 6.5% to end at 14.93. The VIX usually moves inversely to the S&P 500.

Biotech stocks, which have sold off sharply in recent sessions, extended their losses. The Nasdaq biotechnology index slid 1.9% to end at 2,455.84.

The S&P materials sector index tumbled 1.4% and ranked as the biggest decliner among 10 S&P sector indexes.

The only positive sector was the S&P healthcare sector index, up just 0.1% for the day.

Going against the day's downward trend, DirectTV shares shot up 5.7% to end at $77.34 and Dish Network Corp shares jumped 6.3% to close at $62.09. Dish Chief Executive Officer Charlie Ergen recently contacted DirecTV CEO Mike White to discuss a possible tie-up, Bloomberg reported, citing sources familiar with the matter.

After the bell, the US Federal Reserve objected to plans by Citigroup and four other banks to return capital to shareholders, saying it had uncovered deficiencies during an annual test of their financial robustness.

Citigroup shares fell more than 5% in extended-hours trading following the news. The shares had ended the regular session at $50.16, down 0.3%.

In the latest look at the US economy, orders for durable goods rose more than expected in February, ending two straight months of declines. Another report showed private-sector economic activity accelerated in March at a faster clip than in February as the services sector picked up, according to financial data firm Markit's preliminary composite Purchasing Managers Index.

Volume of about 7.1 billion shares traded on US exchanges, slightly above the 6.9 billion average so far this month, according to data from BATS Global Markets.

Decliners beat advancers by a ratio of 2 to 1 on the New York Stock Exchange, while on the Nasdaq, nearly four stocks fell for every one that rose.