Greek debt fears sink Wall St, more losses eyed

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks tumbled on Wednesday, driven lower by escalating Greek debt woes, while troubling U.S. data pointed to further losses ahead.

Financials came under fire after Moody's Investors Service said it may cut the credit ratings of French banks, citing exposure to Greek debt.

U.S. data showed the U.S. economy is facing a troubling mix of higher prices and weak growth. For details, see

"Every day that we get another negative macro report -- they can't keep brushing it under the rug and say we are in a soft patch and it's only temporary," said Ken Polcari, managing director at ICAP Equities in New York.

"They tried to play the Greece thing off like it was going to be settled and clearly it's not, so it's all coming back to haunt them."

The day's losses left the S&P 500 within a stone's throw of its 200-day moving average of 1,256.82. If that level is breached, losses would be likely to accelerate.

Declines in insurers' shares outpaced the broader market, with the KBW insurance index down 3 percent. Allstate lost 2.5 percent to $29.48.

Energy shares also depressed the market as signs of economic weakness fed worries about demand, sending crude to its lowest level since February. Chevron Corp, down 2.2 percent at $98.41, was the biggest drag on the Dow. TheNYSEArca oil index slumped 2.5 percent. ? Continued...

Source: http://feeds.reuters.com/~r/reuters/AFRICAbusinessNews/~3/SVLUynzM6-Q/idAFJOE75F01I20110616

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