By Rodrigo Campos
NEW YORK (Reuters) - Stocks fell on Wednesday as weak data on U.S. housing and orders for long-lasting manufactured goods underscored the prospect of a sharp economic slowdown.
But a rebound off an S&P 500 index technical support level after five days of broad declines helped to buffer losses.
Energy shares led losses on the S&P 500 as coal miners stocks dropped on concerns that power plants would switch to natural gas from coal as the price of gas fell to a three-month low.
Massey Energy
Adding to a string of weak data, new U.S. single-family home sales slumped to a record slow pace in July while orders for costly durable goods, like washing machines and airplanes, rose far less than anticipated, according to government reports.
Data from an industry group on Tuesday had shown an unexpectedly large drop in existing-home sales.
"New home sales was below consensus estimates, but after yesterday's (home resales) number it wasn't so much of a surprise," said Paul Hickey, co-founder of research firm Bespoke Investment Group in Harrison, New York.
The Dow Jones industrial average <.DJI> dipped 44.04 points, or 0.44 percent, to 9,996.41. The Standard & Poor's 500 Index <.SPX> dropped 5.52 points, or 0.52 percent, to 1,046.35. The Nasdaq Composite Index <.IXIC> fell 4.23 points, or 0.20 percent, to 2,119.53.
The S&P 500 found support at 1,040, a level closely watched by chartists. The benchmark index hit lows in the 1,040 area in February, May and early June, indicating some investors may see a dip below it as a buying opportunity.
"At a level like 1,040, where a lot of people are watching, you're going to get a little bit of a bounce," Hickey said.
Bank stocks continued their slide on the weak housing data. The KBW bank index <.BKX> briefly hit 42.70, its lowest level in 2010. Wells Fargo
Healthcare stocks, among the least sensitive to economy swings, outperformed the overall market.
Coventry Health Care Inc
Both luxury homebuilder Toll Brothers Inc
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)
