Wall Street slips on Spanish aid terms, Greek elections

NEW YORK (Reuters) - Stocks fell on Monday in a turnaround from Wall Street's best week of the year as investors grew disappointed about Europe's aid package for Spanish banks and worried about increased volatility as Greece's elections approached.

Spain will be lent up to 100 billion euros ($125 billion) to help the country's battered banks. The size of the package was larger than expected, partially removing a cloud that has been hanging over financial markets.

Investors feared that a banking crisis in Spain would compound the currency bloc's troubles before June 17 elections in Greece, which many fear could lead to Greece's leaving the euro zone.

"Given the gravity of the European problem, not just Spain, people are kind of waking up to the fact that this is something but not enough," said James Dailey, portfolio manager of TEAM Financial Asset Management.

The Dow Jones industrial average <.DJI> was down 25.73 points, or 0.20 percent, at 12,528.47. The Standard & Poor's 500 Index <.SPX> was down 1.75 points, or 0.13 percent, at 1,323.91. The Nasdaq Composite Index <.IXIC> was down 6.38 points, or 0.22 percent, at 2,852.04.

Weak economic data from China over the weekend underscored the hurdles in the way of stronger global growth.

U.S. companies are finding it increasingly difficult to expand revenues. Firms that make up the S&P 500 are expected to boost sales by just 2.2 percent in the current quarter.

"It's not just Europe that can weigh on the market," said Jeff Kleintop, chief market strategist for LPL Financial.

He said other factors were the conclusion of the Federal Reserve's stimulative Operation Twist in June, slowing demand in China, geopolitical risks surrounding Iran, uncertainty about the U.S. election in November and changes in U.S. budget plans following the results of the election.

Wall Street is coming off the previous week's advance, which was 3.7 percent on the S&P 500, the index's biggest weekly gain of 2012.

In a sobering sign of slowing overseas economic growth, China's inflation, industrial output and retail sales all flagged in May. It was the second straight month of sluggish growth, which galvanized policymakers last week into taking their boldest action yet to combat a sharpening slowdown.

Apple shares rose 1.1 percent to $586.70. Apple Inc kicks off its annual conference for software developers on Monday, and more than ever, the consumer electronics juggernaut finds itself in a pitched battle with the online search giant, Google Inc - in smartphones, cloud computing and the never-ending competition for the hearts and minds of the best software developers.

Facebook Inc is on the preliminary list to join the Russell 3000 index <.RUA> <.THY>, according to Russell Investments on Monday. The stock is up 2.1 percent at $27.70.

Goldman Sachs is close to striking a deal over the sale of its hedge fund administration business with State Street Corp , the Financial Times reported. The move would create the largest administration services provider to hedge funds worldwide. The stock fell 0.7 percent to $93.88.

(Reporting By Angela Moon, editing by Kenneth Barry)

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