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Stocks broadly lower on China, Greece worries

Stocks broadly lower on China, Greece worries

Worries over slowing economic growth in China and concern that a Greek bond exchange deal may not be going according to plan are pushing U.S. stocks lower Monday morning.
The Dow Jones industrial average fell 82 points to 12,893 in the first hour of trading, a loss of 0.6 percent.
Investors are particularly worried of the effect of a slowdown in China's economy on global growth. In recent years, China's growth helped shore up the global economy in the wake of a banking crisis, a deep U.S. recession and debt problems in Europe.
On Monday, China's premier Wen Jiabao lowered China's target growth rate to 7.5 percent from 8 percent, where it has stood for years.
The news hurt stocks of large U.S. materials companies that derive significant earnings from China like heavy equipment maker Caterpillar Inc., which was off over 1 percent, and aluminum maker Alcoa Inc., off 2 percent.
In a sign that not all's well in the U.S. economy either, the Commerce Department said factory orders fell 1 percent in January. Businesses sharply reduced orders for machinery and other core capital goods in January after a tax credit expired, pushing U.S. factory orders down by the largest amount in 15 months.
In recent months markets have been lifted by signs of improvement in U.S. economic reports. U.S. stock indexes have been trading at their highest levels since before the collapse of investment bank Lehman Brothers in 2008.
However, traders are watching closely for any signs that the U.S. economy might be losing steam.
Further weighing on the market were worries that there aren't enough private investors participating in Greece's bond swap, which could worsen the European debt crisis. Results are due late Thursday.
Greece and its bondholders have agreed on a debt swap that would reduce the face value of their holdings by 53.5 percent. Bondholders including banks, insurance companies, and investment funds are being offered new bonds that are worth less, have a longer time to be paid off and bear less interest. The debt reduction is one condition of Greece getting a second bailout package from other European countries and the International Monetary Fund.
Banks and energy stocks also fell. Wells Fargo fell 1.6 percent, and Morgan Stanley was off 2.8 percent. Alpha Natural Resources was down 3.5 percent.
In other trading, the S&P 500 index fell 8 points to 1,361. The Nasdaq composite index fell 17 points to 2,958.
Among other stocks making big moves:
_ American International Group was up 3.5 percent as it prepares to reduce the amount it owes the U.S. government for its federal bailout during the financial crisis. It will sell part of its stake in insurer AIA Group to raise about $6 billion.
_ Computer Sciences Corp. was up over 2 percent after it signed a letter with the U.K. Department of Health to deliver healthcare solutions and services in England.