* Durable goods orders drop sharply in June
* China worries, commodities weigh on sentiment
* Oil falls sharply, dropping 4.5 percent
* Dow off 0.6 pct; S&P 500 off 0.8 pct; Nasdaq off 0.7 pct
* For up-to-the-minute market news click []
(Updates to midday, changes byline)
By Rachel Chang
NEW YORK, July 29 (Reuters) - U.S. stocks slid on
Wednesday as a steep drop in U.S durable goods orders in June
fueled fears of more economic weakness and falling commodity
prices hit shares in the energy and resources sectors.
A sell-off in China's stock market on concerns that
authorities there might curb bank lending also hampered the
broader market.
"I'm surprised the markets didn't open down more strongly,
based on what happened in China," said Frank Gretz, market
analyst and technician for Shields & Co in New York. "It's
most affecting certain sectors like the commodities trade."
Shares of energy companies weighed on the Dow, with
Chevron Corp <CVX.N> falling 1.8 percent to $67.10, and Exxon
Mobil Corp <XOM.N> losing 1.2 percent to $71.02.
The S&P energy index <.GSPE> slid 2.4 percent. U.S.
front-month crude futures <CLc1> declined $3.03, or about 4.5
percent, to $64.20 a barrel.
Other natural resources stocks also fell, including miners
and big exporters, with Freeport-McMoRan Copper & Gold Inc
<FCX.N> down 5 percent at $55.66.
The Dow Jones industrial average <> shed 55.02 points,
or 0.61 percent, to 9,041.70. The Standard & Poor's 500 Index
<.SPX> fell 7.49 points, or 0.76 percent, to 972.13. The
Nasdaq Composite Index <> fell 13.20 points, or 0.67
percent, to 1,962.31.
The Commerce Department said June U.S. durable goods
orders fell 2.5 percent, the largest drop since January, after
rising a revised 1.3 percent in May, which previously was
reported as a 1.8 percent surge. [] Durable goods
are manufactured goods such as washing machines, refrigerators
and cars, intended to last three years or more.
During Asia's regular trading hours on Wednesday, the
Shanghai Composite Index <> slid 5 percent -- its biggest
daily decline in eight months.
But China's benchmark stock index is up 80 percent this
year overall.
"Their market has been so strong that a 5 percent drop is
not substantial," said Gretz.
Talk that China might seek to cool its markets was a
worrying development as some investors had bet that Chinese
demand would underpin the global economic recovery.
Caterpillar Inc <CAT.N>, a maker of bulldozers and
excavators, shed 3.2 percent to $41.51 and ranked as the
biggest drag on the Dow industrials. The stock of aluminum
producer Alcoa Inc <AA.N>, another Dow component, lost 2.7
percent to $10.96 on the New York Stock Exchange.
Among the Nasdaq's major decliners, Yahoo Inc <YHOO.O>
tumbled after the Internet media company announced an Internet
advertising deal with Microsoft Corp <MSFT.O>.
Yahoo's stock tumbled 11.4 percent to $15.26 as some
investors were disappointed by the limited scope of the deal.
[] In contrast, Microsoft's stock was up 0.2
percent at $23.51.
(Editing by Jan Paschal)
