Wall St. falls as Greece uncertainty weighs

(Reuters) - Wall Street was mostly lower on Wednesday as investors waited for more clarity on the ongoing debt talks between Greece and its creditors even as data showed that the U.S. economy's first-quarter contraction was smaller than earlier thought.

Greek Prime Minister Alexis Tsipras has attacked the stance of certain creditors as "strange" because they rejected proposals presented by Athens to bridge a budget gap, a government official said without referring to specific proposals or which of the three institutions Tsipras was blaming for the deadlock.

Tsipras will meet the heads of the European Central Bank, the International Monetary Fund and the European Commission in Brussels before a meeting of euro zone finance ministers at 1300 p.m. ET.

Greece needs fresh funds to avoid defaulting on a $1.8 billion debt repayment to the IMF on June 30.

"The U.S. market is taking some signals from the weakness in Europe," said John Canally, chief economic strategist at LPL Financial in Boston.

"The situation could set a precedent for other countries wanting to leave the euro zone and that creates some uncertainty that markets don't like."

The U.S. Commerce Department said gross domestic product fell at a 0.2 percent annual rate in the January-March quarter, instead of the 0.7 percent it estimated last month.

Investors have been keeping a keen eye on economic data to see if the U.S. economy has recovered from a slow start at the beginning of the year. The Federal Reserve has said it remains data-dependent and expects to raise rates when it sees a sustained rebound in the economy.

Most economists and top Wall Street banks expect the Fed to raise rates in September as data points to a recovery.

"The Fed is itching to raise rates and just want to get the first rate hike out of the way," said Canally.

Applications for U.S. home mortgages rose last week as interest rates dipped.

At 10:45 a.m. ET the Dow Jones industrial average <.DJI> was down 23.92 points, or 0.13 percent, at 18,120.15, the S&P 500 <.SPX> was down 0.6 points, or 0.03 percent, at 2,123.6 and the Nasdaq Composite <.IXIC> was up 1.09 points, or 0.02 percent, at 5,161.19.

Seven of the 10 major S&P 500 sectors were lower, with the materials index <.SPLRCM> leading the declines with a 0.5 percent drop.

Apple shares jumped 2.1 percent to $129.74 and was the biggest boost to all three indexes after Carl Icahn said that he sees the company representing the same opportunity that Netflix offered several years ago.

Netflix shares were up 3.6 percent at $705.80, a day after the company's board approved a seven-for-one stock split. Netflix's shares have almost doubled this year.

Lennar rose 4.7 percent to $51.31 after the second-largest U.S. homebuilder reported a better-than-expected 33 percent jump in quarterly profit as it sold more homes at higher prices.

Staples fell 2.9 percent to $16.13 and Office Depot was down 2.1 percent at $8.92, after a report that Staples' $6.3 bln acquisition of its smaller rival is less likely after federal judge blocked food service distributor Sysco's deal to buy US Foods.

Declining issues outnumbered advancing ones on the NYSE by 1,602 to 1,207. On the Nasdaq, 1,601 issues fell and 943 rose.

The S&P 500 index showed 17 new 52-week highs and two new lows, while the Nasdaq recorded 91 new highs and 19 new lows.

(Editing by Don Sebastian)