STOCKS-Recovery worries weigh down Wall St

* U.S. should plan for more fiscal stimulus-Obama adviser

* Credit card delinquency soars, adding to worry over debt

* Indexes down: Dow 1.0 pct; S&P 0.9 pct; Nasdaq 1.0 pct

* For up-to-the-minute market news click [STXNEWS/US]
(Updates prices, adds AmEx, Intel shares, context)

By Rodrigo Campos

NEW YORK, July 7 (Reuters) - U.S. stocks fell on Tuesday as
investors turned cautious ahead of earnings season, and talk of
a second stimulus package underscored worries about the U.S.
economic recovery.

Signaling the economy's difficulty in rebounding from a
deep recession, a member of the Obama administration's economic
advisory panel said the United States should plan to possibly
provide a second round of stimulus funds to prop up the
economy. For details, see [ID:nSP379268]

"Talk of a new stimulus plan is actually a confidence
killer," said Joseph Battipaglia, market strategist at Stifel
Nicolaus in Yardley, Pennsylvania. "That would mean we've added
a trillion dollars to debt without anything to show for it."

Investor concerns over mounting debt was also underpinned
by a report showing cash-strapped consumers fell behind on
their credit card bills in record numbers in the first quarter.
[ID:nN07299679]

Shares of credit card company American Express Co (AXP.N)
shed 1.7 percent at $23.11 and the S&P Consumer Finance index
.GSPCFI fell more than 3 percent.

In the broader market energy stocks were among the biggest
drags, along with other economically sensitive sectors like
basic materials and industrials. Healthcare, a defensive play,
was the only notable S&P sector with gains so far in the
session.

The Dow Jones industrial average .DJI fell 83.13 points,
or 1.00 percent, to 8,241.74. The Standard & Poor's 500 Index
.SPX lost 8.01 points, or 0.89 percent, to 890.71. The Nasdaq
Composite Index .IXIC dropped 18.24 points, or 1.02 percent,
to 1,769.16.

Investors also have their eyes set on the quarterly
earnings season that gets underway this week, with Alcoa Inc
(AA.N) set to report on Wednesday. Alcoa, a Dow component, is
expected to post a third consecutive quarterly loss. For an
Alcoa earnings preview, see [ID:nN06271341]

Stifel's Battipaglia said earnings are expected to
disappoint. "The anticipation is that Alcoa's report will be
even worse than expected," he said.

"The expectation of a speedy recovery is starting to slow
because there is no evidence to support it."

The loss of confidence in the economic recovery has sent
oil prices tumbling. New York crude CLc1 fell close to 2
percent and its five-session slide has pressured energy stocks,
a large sector of the S&P 500.

Oil services company Schlumberger Ltd (SLB.N) fell 2.5
percent to $50.17 while blue-chip Exxon Mobil (XOM.N) lost 1.3
percent to $67.22.

The S&P energy sector .GSPE index lost 1.6 percent.

On the upside, shares of chip maker Intel Corp (INTC.O)
rose 1.3 percent to $16.75 after Banc of America
Securities-Merrill Lynch upgraded the U.S. semiconductor
industry and five stocks in the sector, including Intel, saying
recent data suggested emerging signs of a turn in end demand.
[ID:nBNG299276]

But the PHLX semiconductor index .SOXX shed 0.4 percent.

The broad S&P 500 index rallied about 40 percent from
12-year lows hit in early March on expectations of a speedy
economic recovery. But the rally wilted in the last month, as
investors sought stronger evidence that conditions were
improving.
(Editing by Padraic Cassidy)


Source: http://www.reuters.com/article/usMktRpt/idUSN0731273620090707