* Alcoa to report Q2 results after bell; loss expected
* Energy shares decline as crude oil futures drop
* Dow off 0.6 pct; S&P off 1 pct, Nasdaq down 0.7 pct
* For up-to-the-minute market news click []
(Updates to mid-afternoon, changes byline)
By Edward Krudy
NEW YORK, July 8 (Reuters) - U.S. stocks fell on Wednesday
as lingering worries about the state of the economy hit risk
appetites globally and investors grappled with an uncertain
outlook for second-quarter earnings.
The earnings season unofficially begins after the bell,
with the release of results from aluminum giant Alcoa Inc
<AA.N>, the first Dow component to report. Investors are
concerned that companies will have little good news in their
quarterly reports and outlooks.
"A lot of people are waiting to see second quarter earnings
and guidance," said Michael James, senior trader at regional
investment bank Wedbush Morgan in Los Angeles.
"If you don't get some more optimistic commentary to
support the move we had from March lows, we run the risk of
running down another 5 percent."
The Dow Jones industrial average <> fell 48.45 points,
or 0.59 percent, to 8,115.15. The Standard & Poor's 500 Index
<.SPX> dropped 8.91 points, or 1.01 percent, to 872.12. The
Nasdaq Composite Index <> lost 12.48 points, or 0.71
percent, to 1,733.69.
The major stock indexes briefly pared losses after an
auction of reopened 10-year Treasury notes drew strong demand,
easing concerns about the U.S. government's ability to finance
spending. But sentiment was still broadly negative, with light
volumes and about three stocks declining for each one advancing
on the New York Stock Exchange.
Alcoa is expected to post its third straight loss due to
falling demand. The stock fell 0.8 percent to $9.33 and was one
of the biggest percentage losers on the Dow.
Energy shares dropped as August crude oil futures <CLc1>
fell 4.4 percent to $60.14 per barrel, touching more than asix-week low.
The U.S. Energy Information Administration released data
that showed gasoline and distillate inventories rose more than
expected last week, pointing to ongoing weakness in demand --
adding to fears about the economy. []
The S&P Energy index <.GSPE> slid 1 percent as
ConocoPhillips <COP.N> dropped 2.3 percent to $39.04.
Copper, a barometer for global demand, hit a fresh two-week
low in an across-the-board commodities selloff.
In an overall shift away from riskier assets, investors in
global currency markets unwound positions in which they
borrowed in yen to fund riskier, higher-yielding investments.
That sent the dollar, euro and other world currencies lower
against the Japanese currency. []
After a rally that pushed up the S&P 500 as much as 40
percent from 12-year lows in early March, investors have been
met with a rash of data -- especially the weaker-than-expected
June payroll report last week -- that has undermined hopes for
an economic rebound.
"People were taken aback by the jobs number," said Todd
Leone, head of listed trading at Cowen & Co in New York. They
thought, 'How's the economy going to get going if they jobs
number continues to be bad like that.'"
Leaders of the Group of Eight richest nations and the major
developing powers are gathered for a three-day summit in Italy.
They are expected to agree the world's economy is still too
weak to remove stimulus measures. []
(Reporting by Edward Krudy; additional reporting by Caroline
Valetkevitch; editing by Jeffrey Benkoe)
