US STOCKS-Wall St falls as consumer spending turns flat

                                

                                
 * Consumer spending wilts, unexpectedly flat in April
                                
 * Apple rises as iPad makes debuts outside US
                                
 * Indexes down: Dow 0.8 pct; S&P 0.8 pct; Nasdaq 0.8 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates to morning trading, adds economic data)
                                
 By Rodrigo Campos
                                
 NEW YORK, May 28 (Reuters) - U.S. stocks fell on Friday as
data showed consumer spending was unexpectedly flat last month
and growth in business activity in the U.S. Midwest slowed.
                                
 Investors jumped on the chance to book gains heading into a
holiday weekend and after Wall Street's rally in the previous
session.
                                
 Energy shares were among the biggest losers on Friday, a
day after the S&P energy sector index <.GSPE> scored its
largest gain in 14 months. Halliburton <HAL.N> dropped 7
percent to $25.09 and Schlumberger <SLB.N> fell 5.3 percent to
$56.63.
                                
 "You have to take into consideration some digestion after
yesterday's strong move," said Manny Weintraub, managing
director at Integre Advisors in New York.
                                
 "Also, the economic factors that caused the decline for the
month are still there," Weintraub said.
                                
 May is on track to be the worst month for stocks since
February 2009 after hitting an 18-month high late last month as
investors fretted over a debt crisis in Europe and its
implications on global growth.
                                
 The Commerce Department said April was the first month
since September that consumer spending did not increase, but
the largest gain in real disposable income in nearly a year
gave hope spending will resume in coming months.
[ID:nN28167458]
                                
 The Dow Jones industrial average <.DJI> dropped 88.28
points, or 0.86 percent, to 10,170.71. The Standard & Poor's
500 Index <.SPX> fell 10.56 points, or 0.96 percent, to
1,092.50. The Nasdaq Composite Index <.IXIC> slid 23.12 points,
or 1.02 percent, to 2,254.56.
                                
 Apple Inc <AAPL.O> shares rose 1.4 percent to $256.80 after
Asian and European customers mobbed stores as the iPad tablet
computer debuted outside the United States. [ID:nLDE64R0DZ]
                                
 Bank of America Merrill Lynch raised its price target on
the retail and technology bellwether by $25 to $325 and kept
its "buy" rating.
                                
 Strong results from apparel retailer J Crew Group Inc
<JCG.N>, up 4.2 percent to $45.70, helped limit losses in
retail stocks.
                                
 The Institute for Supply Management-Chicago business
barometer dropped to 59.7 in May from 63.8 in April, and the
employment component of the index sank to 49.2 from 57.2,
indicating a contraction.
                                
 The Thomson Reuters/University of Michigan Surveys of
Consumer showed consumer sentiment rose a bit in May from April
but was roughly unchanged from levels since February, while the
one-year inflation expectations index also climbed, to its
highest since October 2008.
                                
 U.S. markets will be closed on Monday for the Memorial Day
holiday.
  ( Editing by Padraic Cassidy)