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."

"Everyone is just trying to get a read on where this is heading. There's so much in the way of structural imbalances in the recovery that these flat spots are completely normal but the recovery isn't strong enough not to feel some pain from these flat spots," he said.

Of the 4.2 billion shares that traded on the New York Stock Exchange, 7% advanced while 92% declined. 2 million shares changed hands on the Nasdaq.

"We need continued progress on all fronts and no new front to open up before we can see the market go back to where it was," said Jim Cramer in his RealMoney blog on Wednesday. "I am seeing ample research that indicates how cheap this market has become. I saw a chart yesterday that basically said tech's the cheapest it has ever been."

Basic materials and energy stocks took the session's biggest losses while defensive names showed mild declines. Bank of America ( BAC), JPMorgan Chase ( JPM), Alcoa ( AA) and Caterpillar ( CAT) were the Dow's biggest laggards, while McDonald's ( MCD), Walt Disney ( DIS) and Kraft Foods ( KFT) traded only slightly to the downside. All 30 Dow components ended in negative territory.

Amidst the bad news, shares of Internet radio company Pandora Media ( P) made a strong debut on the New York Stock Exchange , rising as high as $26 per share at one point, nearly 63% above the IPO's $16 per share pricing. But the stock cooled in afternoon action and ended at $17.42 with volume running above 37 million.

Boeing ( BA) said it plans to boost production of the 737 aircraft to 42 planes per month in the first half of 2014, leading to an annual production of 500 airplanes, or two per workday. The stock declined 1.1% to $73.85.

Shares of JPMorgan Chase ( JPM) fell 2.2% to $40.68 on news that the company agreed to a multi-million dollar fine for what banking regulators described as "high-pressure sales tactics" tied to a discontinued credit-protection product.

The Securities and Exchange Commission is looking into the sale by Merrill Lynch of a complex mortgage-related security it created for an Illinois hedge fund , according to a Financial Times report. Shares of Bank of America, Merrill Lynch's parent company, ended down 2.9% at $10.49.

Shares of solar products and services company SunPower ( SPWRA) lost 14.6% to $17.66 after a Goldman Sachs analyst lowered his view on the stock to sell from neutral.

Information processing and software company DST Systems ( DST) has received several buyout offers from private-equity firms , according to a Reuters report. DST's stock gained 13% to $54.51.

Scotts Miracle-Gro ( SMG) saw its stock slip 6% to $49.19 after the lawn and garden products company said it expects full-year earnings to fall short of Wall Street's expectations because of increased promotional activity and unfavorable weather conditions in the U.S.

The Energy Information Administration reported a surprise 3.4-million barrel increase to crude oil inventories in the week ended June 10. Analysts had been forecasting a decline of 1.9 million barrels, according to a Platts survey.

Late Tuesday, the American Petroleum Institute said crude oil supplies fell by 3.03 million barrels last week.

The July crude oil contract tumbled $4.19 to $95.18 a barrel. A stronger dollar didn't stop a rise in Gold prices. August delivery gained $5 at $1,531 an ounce.

The benchmark 10-year Treasury rose 1 3/32, diluting the yield to 2.976%.

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-- Written by Chao Deng and Melinda Peer in New York.
Copyright 2011 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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