US STOCKS-Wall St drops as Oracle hits tech, banks drag

                                
 (Updates to early afternoon, changes byline)
                                
 By Ellis Mnyandu
                                
 NEW YORK, March 27 (Reuters) - U.S. stocks fell in volatile
trade on Thursday as a revenue shortfall at Oracle Corp
<ORCL.O> fueled a technology sector sell-off on concerns about
downturn in a business spending.
                                
 Investors took the news from Oracle, seen as a bellwether
for the software industry, as signaling the widening impact of
the housing slump on corporate spending.
                                
 Oracle shares topped the list of major decliners in both
the Nasdaq and the Standard & Poor's 500 Index with a slide of
more than 6 percent.
                                
 A drop in Google Inc's <GOOG.O> shares after a brokerage
cut its price target on the Web search leader added to
anxieties about tech stocks.
                                
 "The problem with Oracle was that they said they see a
little bit of a slowdown and that's scaring everybody," said
Dave Rovelli, managing director of U.S. equity trading at
Canaccord Adams in New York.
                                
 The Dow Jones industrial average <.DJI> slid 76.69 points,
or 0.62 percent, to 12,346.17. The Standard & Poor's 500 Index
<.SPX> dropped 8.16 points, or 0.61 percent, to 1,332.97. The
Nasdaq Composite Index <.IXIC> slumped 30.23 points, or 1.30
percent, to 2,294.13.
                                
 Oracle shares dropped to $19.47 on the Nasdaq, while shares
of Apple Inc <AAPL.O>, the computer and iPod maker, shed 2.3
percent to $141.83.
                                
 Shares of BlackBerry devices maker Research In Motion Ltd
<RIMM.O> slumped 4.6 percent to $112.73. Google shares lost 3.3
percent to $443.27 after Lehman Brothers cuts its price target
by 10 percent on the stock to $580.
                                
 Nervousness about the financial sector's profits also
weighed on the market.
                                
 Sanford C. Bernstein, a brokerage, forecast Merrill Lynch &
Co <MER.N> to post a loss in the first quarter instead of its
previous forecast for a profit, citing $4.5 billion in total
writedowns at the U.S. brokerage. For details, see
[ID:nBNG197732].
                                
 Merrill Lynch shares slid more than 5 percent to $42.15 on
the New York Stock Exchange. Standout decliners on the
financial sector included Bank of America Corp <BAC.N>, the No.
2 U.S. bank by assets, whose stock declined 2.2 percent to
$38.95.
                                
 Shares of Lehman Brothers Holdings Inc <LEH.N> dropped 9
percent to $38.68, a decline traders attributed to rumors that
the fourth-largest U.S. investment bank could suffer the same
fate as Bear Stearns <BSC.N>, which succumbed under the weight
of soured subprime mortgage debt.
                                
 A Lehman spokeswoman called the rumors "totally unfounded,"
which contributed to the stock taking back much of its losses.
[ID:nN27289860].
                                
 Before Wall Street's opening bell, the Commerce Department
said U.S. corporate profits fell 3.3 percent in the fourth
quarter in a report that also confirmed the U.S. economy,
measured by gross domestic product, grew at a meager annual
pace of 0.6 percent in the same period. [ID:nN27348462] GDP is
the measure of all goods and services produced within U.S.
borders.
 (Editing by James Dalgleish)