Wall Street falls 1 precent as dollar strength raises profit fears

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks fell more than 1 percent on Tuesday afternoon as strength in the dollar increased worries about the earnings outlook for multinational companies.

The S&P 500 and Dow turned negative for the year and the S&P 500 was off more than 3 percent from its March 2 record closing high. The Nasdaq has fallen more than 2 percent from its 15-year peak, also reached on March 2.

All 10 of the S&P 500 sectors were lower, except for utilities, up 0.2 percent. Financial, energy, industrial and consumer discretionary sectors, all down more than 1 percent, were among the biggest drags. Shares of ConocoPhillips fell 1.7 percent to $60.92.

Concerns over Greece's debt talks added to the day's weakness, which took the S&P 500 below its 50-day moving average, a sign of weak near-term momentum.

The U.S. dollar index rose 0.9 percent and was on track for its fourth rise of the past five sessions, up 3.3 percent over that period.

"The issue out there has been the strong employment report, which has set off fears of an interest rate hike by the Fed sooner or more aggressively than had been anticipated," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

That has added to recent dollar strength, which will continue to weigh on earnings for U.S. multinationals, he said.

At 2:18 p.m., the Dow Jones industrial average fell 274.99 points, or 1.53 percent, to 17,720.73, the S&P 500 lost 28.38 points, or 1.36 percent, to 2,051.05 and the Nasdaq Composite dropped 64.79 points, or 1.31 percent, to 4,877.65.

Euro zone ministers agreed that technical talks between finance experts from Athens and its international creditors would start on Wednesday, with the aim of unlocking further funding. However, the ministers warned Greece that it had "no time to lose."

On the upside, Urban Outfitters Inc late Monday reported earnings that beat expectations. Shares rose 11 percent to $43.68 and were by far the biggest gainer on the S&P 500.

Declining issues outnumbered advancers on the NYSE by 2,177 to 859, for a 2.53-to-1 ratio; on the Nasdaq, 1,984 issues fell and 706 advanced, for a 2.81-to-1 ratio favoring decliners.

The S&P 500 was posting 4 new 52-week highs and 15 new lows; the Nasdaq Composite was recording 39 new highs and 78 new lows.

(Editing by W Simon and Nick Zieminski)