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Stocks Plunge on Weak Data, Greece Concerns

NEW YORK ( TheStreet) -- Stocks sank Wednesday as disappointing economic data and intensifying protests in Greece rattled Wall Street.

All three major U.S. equity indexes retreated almost 2%, wiping out yesterday's strong gains, and setting stocks up for a seventh straight week of declines.

The Dow Jones Industrial Average slide 179 points, or 1.5%, to 11,897. The S&P 500 lost 22 points, or 1.7%, to 1265, and the Nasdaq Composite dropped 47 points, or 1.8%, to 2631. Volatility, as measured by the VIX Volatility Index, spiked at close to 20 for the first since late March.

News of a possible resignation by Greece's prime minister following violent union strikes sparked a selloff of the euro. By closing, the euro had fallen 1.8% against the dollar, which settled 1.5% higher against a basket of currencies.

Hong Kong's Hang Seng lost 0.7% while Japan's Nikkei added 0.3%. The FTSE in London shed 1%, and the DAX in Frankfurt fell 1.3%.

In the United States, Wall Street learned that manufacturing activity in the New York area slowed significantly in June. The Empire State manufacturing survey sunk to a negative reading of -7.8, from May's level of 11.9. Economists had expected the index to dip to a reading of 10 in June.

The Federal Reserve said that industrial production grew by 0.1% in May , falling short of expectations for a 0.2% gain. Capacity utilization remained unchanged at 76.7% in May, which was downwardly revised from April's initial level of 76.9%. Economists had expected utilization to tick up to 77% in May, according to Briefing.com.

The Bureau of Labor Statistics said consumer prices rose 0.2% in May, which was slightly ahead of the 0.1% uptick that economists had been expecting . Inflation over the past year has gained 3.6%, despite the recent easing of gas prices.

The National Association of Home Builders said its housing market index fell to a reading of 13 in June, from May's level of 16. The market had been anticipating no change from May's reading, according to Briefing.com.

"Manufacturing has been a pretty strong engine for the economy during the recovery so couple today's data with the disappointing May employment report and we're clearly in a flat spot," said Paul Ballew, chief economist at Nationwide Insurance. "Now there's some concern that the flat spot will persist beyond the second quarter and into the second half of the year."

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