Wall St falls as data triggers slowdown worry

By Chuck Mikolajczak

NEW YORK (Reuters) - Wall Street stocks were lower for a second straight session after data in China and the United States added to a spate of recent indications the global economy may be slowing.

China's economic recovery unexpectedly slowed in the first quarter, with the annual rate of growth in the world's second-largest economy easing back to 7.7 percent from the 7.9 percent of the previous quarter, below economists' forecast for an 8.0 percent expansion.

Adding to concerns about a slowing global economy, the New York Fed's "Empire State" index of general business conditions fell to 3.05, from 9.24 in March, short of economists' forecasts for a smaller decline to 7 as new orders tumbled.

U.S. stocks had dipped on Friday, partly due to weak retail sales and consumer sentiment reports, but still managed to notch their second-best weekly performance of the year with a 2.3 percent gain.

"None of the economic data has been very good for the last couple of weeks, when you look at the whole scope of data it looks like we have been going into a slowdown here," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"I wouldn't say this is over yet, but there are enough indicators out there to really indicate that investors should approach this market with a degree of caution which doesn't seem to exist right now."

The market has been very resilient in its run-up to record highs hit last week. The declines on Monday put the S&P 500 on track for its first two-day losing streak in a month.

Among earnings reports, Citigroup shares advanced 2.6 percent to $45.93 after reporting a higher-than-expected 31 percent rise in first-quarter profit.

In deal news, Dish Network Corp , the No. 2 U.S. satellite television provider, offered to buy Sprint Nextel Corp for $25.5 billion in cash and stock, a move that could thwart the proposed acquisition of Sprint by Japan's SoftBank Corp . Sprint shares jumped 15.8 percent to $7.20 as the best performer on the S&P 500.

The Chinese data weighed heavily on commodities, with U.S. crude oil down 2.3 percent to $89.69 as it recovered slightly off its lowest level of the year, while gold sank further into bear market territory.

The PHLX Gold/Silver index tumbled 8.1 percent and the PHLX oil service sector index fell 2.5 percent.

Chevron lost 1.3 percent to $118.40 as one of the biggest drags on the Dow while Freeport-McMoRan Copper and Gold dropped 6.1 percent to $29.98. Freeport was also downgraded to "sell" from "neutral" at Citigroup.

The Dow Jones industrial average dropped 81.06 points, or 0.55 percent, to 14,784.00. The Standard & Poor's 500 Index lost 10.65 points, or 0.67 percent, to 1,578.20. The Nasdaq Composite Index fell 21.31 points, or 0.65 percent, to 3,273.63.

U.S. homebuilder sentiment waned for the third month in a row in April, with builders citing increasing materials costs and supply chain concerns, the National Association of Home Builders said.

Earnings season heats up this week, with 74 companies in the S&P 500 scheduled to report, including American Express Co , Goldman Sachs , Bank of America and Google Inc .

Genetic testing equipment maker Life Technologies Corp has agreed to a $13.6 billion cash buyout by Thermo Fisher Scientific Inc , in one of the year's biggest corporate takeovers. Life Technologies shares climbed 7.7 percent to $73.25 and Thermo Fisher advanced 3.5 percent to $82.41.

(Reporting by Chuck Mikolajczak; Editing by Theodore d'Afflisio, Kenneth Barry and Nick Zieminski)