Wall Street sags for third straight session as tech weighs

By Lewis Krauskopf

(Reuters) - Wall Street stumbled for a third straight session on Monday as tech stalwarts Microsoft and Apple dragged on indexes and investors braced for major economic and political events in the United States and Europe.

Microsoft fell 2.7 percent after announcing it would buy online networking company LinkedIn for $26.2 billion in its biggest-ever deal. LinkedIn shares jumped 46.6 percent.

Apple shares fell 1.2 percent as the iPhone maker held its developers conference in San Francisco. Adding to the pressure from the tech sector, Facebook shares were off 2 percent after CNBC said Citron Research was short on the stock.

The Dow Jones industrial average fell 78.17 points, or 0.44 percent, at 17,787.17, the S&P 500 was down 10.28 points, or 0.49 percent, at 2,085.79 and the Nasdaq Composite declined 32.20 points, or 0.66 percent, at 4,862.35.

Nine of 10 S&P 500 sectors were lower in afternoon trade, with tech <.SPLRCT> and materials <.SPLRCM> the biggest decliners.

The Federal Reserve is set to meet on Tuesday and Wednesday. While traders predict the U.S. central bank will not raise interest rates, "everybody is going to be ready to parse" the Fed's statement to gauge when it might seek to do so, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

A slew of U.S. economic data is due this week, including retail sales on Tuesday, after a weak employment report earlier this month raised questions about the economy's strength and pace of future rate hikes.

Investors also paid close attention to the run-up to Britain's vote on June 23 on whether to remain in the European Union.

"We're a week away from the vote on Brexit and that is causing some stress in some of the international markets," Hellwig said. "There's still no clear cut indication as to how that might go, and as a result, that uncertainty is there and kind of maybe spilled over into our market a little."

A weekend attack by a gunman at a nightclub in Orlando, Florida added to the dour mood. Shares of gun makers rose, with Smith & Wesson up 7.5 percent and Sturm Ruger 9.3 percent higher.

Symantec shares rose 6.2 percent to $18.37 after it said it would buy privately held cyber security company Blue Coat for $4.65 billion.

Declining issues outnumbered advancing ones on the NYSE by 2,151 to 857, for a 2.51-to-1 ratio on the downside; on the Nasdaq, 2,016 issues fell and 789 advanced for a 2.56-to-1 ratio favouring decliners.

The S&P 500 posted 25 new 52-week highs and 2 new lows; the Nasdaq recorded 35 new highs and 48 new lows.

(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian and Meredith Mazzilli)