Wall Street dips but indexes on track for best week in two months

By Tanya Agrawal

REUTERS - U.S. stocks were down in early afternoon trading on Friday, a day after a strong rally pushed the Nasdaq Composite index to a record high, but the major indexes were still on track for their strongest weekly performance in about two months.

The Nasdaq Composite broke its last standing milestone from the dot-com era on Thursday, while the S&P 500 rose to within 0.5 percent of its record high on the Fed's perceived dovishness regarding the pace of a rate hike.

Wall Street was also affected on Friday by the "quadruple witching" day - the expiration of stock options, index options, index futures and single-stock futures - as traders close hedging positions or roll them over at the last minute.

The Greece crisis also showed no signs of receding. Euro zone leaders will hold an emergency summit on Monday to try to avert a Greek default after bank withdrawals accelerated and government revenue slumped as the debt talks drag on.

The possibility that Greece's mounting debt woes could disrupt world financial markets and impact the U.S. economy has been a big topic of discussion at the Federal Reserve, San Francisco Fed President John Williams said on Friday.

"When you're facing the turmoil that is all things Greece, and the quadruple witching, you'll have some pretty decent turmoil," said Hugh Anderson, managing director at HighTower Advisors in Las Vegas.

"2015 has turned out to be a fairly 'noisy' market. You're getting a lot of luster without a lot of progress."

At 12:36 p.m. ET (1636 GMT) the Dow Jones industrial average was down 49.31 points, or 0.27 percent, at 18,066.53, the S&P 500 was down 5.9 points, or 0.28 percent, at 2,115.34 and the Nasdaq Composite was down 14.37 points, or 0.28 percent, at 5,118.58.

Eight of the 10 major S&P 500 sectors were lower, with the energy index leading the declines with a 0.88 percent drop.

Apple's 0.9 percent drop weighed the most on the S&P and the Nasdaq while Traveler's 1.5 percent fall was the biggest drag on the Dow.

Cleveland Fed president Loretta Mester is scheduled to speak later in the day.

ConAgra Foods' shares were up 8.6 percent at $42.50 after activist hedge fund Jana Partners took a stake in the company.

Macerich slumped 6.3 percent to $77.22 as Simon Property Group exits its ownership stake in the No.3 U.S. mall owner, sources told Reuters.

KB Home rose 10 percent to $16.46 after the homebuilder's quarterly results beat estimates, as it sold more homes at higher prices.

Hershey was down 3.6 at $88.89 after the chocolate maker trimmed its full-year sales growth forecast, citing weak sales in China.

Declining issues outnumbered advancing ones on the NYSE by 1,610 to 1,323. On the Nasdaq, 1,502 issues fell and 1,168 advanced.

The S&P 500 index showed 22 new 52-week highs and two new lows, while the Nasdaq recorded 95 new highs and 24 new lows.

(Reporting by Tanya Agrawal; Editing by Don Sebastian)